News - Here's why the Cardano (ADA) price is rising
At the end of October, Cardano came out of its months-long summer sleep, recorded a price increase of more than 50 percent at times, is currently stabilizing around $0.37 and is thus approaching its level before the collapse of the bankrupt exchange FTX. There are several explanations for the strong growth.
No other token in the top 10 achieved such strong price growth as ADA over the past week. The Cardano network's native token is up nearly 24 percent. This rally was driven in part by major investors who pulled in nearly 1.9 billion ADA (US$600 million) last month, according to analysis platform IntoTheBlock.
$ADA got a strong vote of confidence last month. Big holders accumulated 1.89 billion ADA last month, translating to over $600 million at current prices.— IntoTheBlock (@intotheblock) November 7, 2023
The majority of the accumulation took place between $0.249 and $0.271.
That this is not just a temporary increase can be seen from various statistics. According to StrikeRewards strike activity on Cardano rose nearly 16 percent last week, to just over $8 billion.
At the same time, the total locked value, i.e. the total number of locked tokens in the network, increased nearly 50 percent last month to currently US$238.09 million. This is according to data from DeFiLlama. Cardano is slowly fighting its way into the top 10, but lags behind major leader Ethereum (TVL of US$24.05 billion). According to cryptoanalysis service Messari Cardano's TVL has increased 198 percent since the beginning of the year.
Altogether, the indicators point to increasing network activity and thus that investor confidence in ADA is slowly but surely returning.
A driver of the exchange rate is likely due to a collaboration between Cardano and Polkadot. On Monday, the two protocols announced a collaboration to jointly develop solutions for greater interoperability and scalability between different blockchains. A new L1 network is planned that combines the best of both worlds. To do this, Cardano developers rely on "Substrat," a modular development tool from Polkadot that can connect different blockchains.
1/ Cardano will use Substrate, the foundation of the Polkadot SDK, to build out its “partner chain” project — showcasing Substrate's potential to expand across Web3, and its ease of use for other chains and ecosystems 🛠️— Polkadot (@Polkadot) November 6, 2023
At the Cardano Summit in Dubai last week, Charles Hoskinson explained that users should be able to choose between different consensus mechanisms. However, it remains to be seen how the project of the two blockchain giants will develop and whether it can lead to a sustainable rise in ADA's price.
In general, the Cardano community is eagerly awaiting the "Voltaire" update. It is the latest and greatest change to the network. Cardano is to become fully decentralized. When the update will come, however, is anyone's guess. In Cardano's history, there have been repeated delays in network updates. This is due to the academic approach of the developers, explains Frederick Gregaard, CEO of the Cardano Foundation.