By
Steve Muchoki
April 19th, 2024
The biggest upgrade to the Cardano blockchain is due to begin rolling out today with the release of the “Shelley” code. The upgrade will make the blockchain more decentralized and scalable.
The eighth-largest cryptocurrency Cardano (ADA) by market value increased this weekend to $0.1021 and came to its record price since June last year. Cardano price rocketed by an astounding 170% in the second quarter.
At press time, ADA is trading near $0.105, meaning more than 200% year-to-date gain. It rose by 6.94%. Its Bitcoin-denominated Cardano price also reached a one-year high of 1,120 satoshis (0.00001120 BTC) last week.
Cardano has certain aspects that helped the price boost especially if we consider the fact that Bitcoin, the top cryptocurrency and a booster for general crypto markets, has inclined just 30% so far this year.
Cardano Reaching Balance of 1,000 Stake Pools while Price Is Up
Daniel Ferraro, marketing director at blockchain intelligence firm IntoTheBlock stated that ADA’s crazy increase came as a result of the overall buzz surrounding the “Shelley” upgrade, which would make Cardano 50 to 100 times more decentralized than other serious blockchain networks. Also, it will suggest a motivating arrangement, or staking, made in order to reach balance around 1,000 stake pools.
Staking can be best explained as the process of holding coins in a cryptocurrency wallet in order to support the operations on a blockchain in return for newly minted coins. It is comparable to earning interest on a fixed-income investment such as bonds.
An incentivized testnet (ITN) was first launched back in December 2019 in order to enable ADA holders, who bought coins before November, to earn real staking rewards by engaging in the testing of the Shelley upgrade. Right now, there are more than $13 billion ADA staked on ITN.
Simon Peters, crypto market analyst at investment platform eToro stated:
“The price rise seen over the past couple of months was likely fueled by the launch of staking on ITN. The ITN phase is over and the focus now is on the mainet, which will go live once the hard fork takes place later this month.”
The first node expanded to the mainet on July 1, containing all features that will be inserted after the hard fork, expected to happen on July 29.
Empowering the Coins
After the finishing of the upgrade, ADA investors, regardless the size of their holdings and the date of acquisition, would be enabled to earn staking rewards and empower their coins.
The whole appeal of making passive income by staking and engaging in network activities is likely to keep traders’ interest in the cryptocurrency high.
Mostafa Al-Mashita, vice president of digital liquidity firm Secure Digital Markets stated:
“The Shelley upgrade will be another case of buy the rumor, sell the news.”
“Buy the rumor, sell the news” attributes the situation where the price of an asset jumps during the month leading up to a long-awaited positive event and then falls on profit-taking after the event has happened.
ADA managed to chisel pretty much exciting winnings during the last few months and may remain better bid ahead of the July 29 mainnet launch.
More than 80% of Cardano’s total supply of 31.112 billion coins is currently “in the money” or making a profit, of which 4.16 billion coins have been bought at an average price of $0.087.
That actually means that the acquisition cost of more than 4 billion coins is just 11% below the current market price of $0.098.
Because of that, holders may be enticed to go for the profits if prices begin to fall and their actions would then add to bearish pressures around the cryptocurrency, possibly leading to a deeper decline.
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