Cardano’s ADA token soared by 150 percent in August to become the world’s third largest cryptocurrency by market capitalization. However, its triumph appears to have been fleeting.
While the rest of the crypto market struggled to find its footing, the decentralized blockchain platform was knocked off its perch on September 29 by Tether, the world’s largest stablecoin.
The gap between the two grew to $3 billion during the night, but it has since shrunk to a mere $1 billion as Cardano seeks to reclaim its throne.
This isn’t even the first setback Cardano has had to deal with this month. As recently as September 2, ADA’s market capitalization was poised to surpass $100 billion, riding the coattails of its Alonzo Hard Fork update. Some even predicted that it would surpass Ethereum in value. However, despite reaching an all-time high of $98.91 billion, the platform fell short of its triple-digit goal.
This time, even the platform’s recent announcement of a slew of new partnerships was insufficient to shield Cardano from the pressures of the global crypto market, which has entered a slump.
Cardano falls despite the announcement of a new stablecoin, partnerships, a new DApp store, and additional funding. The Cardano Summit, which took place from September 25 to September 26, included the launch of the blockchain’s new stablecoin, Djed, in collaboration with fintech company COTI.
Input Output, the development firm behind Cardano, also announced two new collaborations. One is with the Oracle protocol Chainlink, and the other is with DISH Network, a Fortune 500 company based in the United States.
Developers on the Cardano blockchain will also be able to showcase their decentralized applications (DApps) in the Plutus dAppStore, a “trusted and democratized environment for developers to publish their DApps without facing censorship.”
The Plutus dApp Store, similar to Google’s Play Store for Android Apps and Apple’s App Store, will allow users to download Cardano-powered applications.
As if that wasn’t enough, the cryptocurrency’s commercial and venture capital arm, Emrugo, announced $100 million in new funding to further develop the Cardano ecosystem.
Why is market capitalization important?
The market capitalization of a cryptocurrency is one of the primary ways that investors determine whether or not a coin is safe to buy in comparison to its peers — it indicates its potential for growth. The greater the market capitalization of a particular digital asset, the more dominant it is thought to be in the global market. The more dominant it is, the more likely it is to withstand the ebbs and flows of time in the volatile world of cryptocurrencies.
September was a wild ride for all cryptocurrencies, not just Cardano.
Since last week, the crypto market has been fighting China’s instillation of fear, doubt, and uncertainty (FUD). The country reaffirmed its anti-crypto stance and vowed to prohibit all crypto-related activity within its borders.
The crypto market initially dismissed China’s pronouncements as just another scare tactic. Big wig companies, on the other hand, did not have the same reaction.
Binance and Huobi, two of the world’s largest cryptocurrency exchanges, have announced that they will no longer accept new registrations from Chinese users. Sparkpool, the world’s second largest Ethereum mining pool, will cease operations in less than 24 hours. In addition, Alibaba, China’s e-commerce behemoth, announced that it will no longer sell mining equipment.
The cryptocurrency market appears to be regaining its footing as it returns to the green on September 30. Cardano is up 1.95 percent with a price of $2.11, but has yet to reclaim third place.