We are now midway through the week and bitcoin has breached the $10,000 mark. Right now, shortly before the US session open, the cryptocurrency sits at just shy of $10,900, representing a more than $1,000 run over the past 24 hours alone.
While bitcoin is certainly the poster child of the space at the moment, the upside action is not limited to BTC.
On the contrary, we have seen a number of other, smaller, cryptocurrencies and tokens move in line with bitcoin over the last 24 hours and, indeed, many of these have dramatically outweighed bitcoin’s across-the-period-appreciation.
One of these big movers is Cardano (ADA).
In certain Asian regions (we’re looking at you, Japan) this one is quite a big name. Outside of Asia, however, it’s yet to really start gaining traction and this has translated to a relatively depressed market capitalization for the coin in question, ADA, since its initial release back to the start of October.
This wasn’t when the company behind the coin was set up – Cardano has been around since early 2015 in its current iteration – but much of the early phase was development and implementation based and only recently has the ADA coin be made available on a buy and sell basis.
So what is Cardano?
Cardano is a protocol rooted in a blockchain technology, much in the same way that bitcoin is, however with some key differences. Specifically, the blockchain runs on what’s called Haskell code, which is designed to allow for a degree of anonymity and security while also acknowledging the necessity for regulator capabilities.
In some ways it’s similar to Ethereum, running on two different levels: a settlement layer that interacts with a control layer. The settlement layer has a unit of account (so, in this instance, the ADA coin), while the control layer is designed to run smart contracts and is programmed to recognize identity, assisting compliance (and allowing blacklisting, for example).
So how and why is the coin running today?
ADA currently trades for a 137% premium to its price against the US dollar from just 24 hours ago and, subsequent to a couple of hours’ worth of consolidation, looks like it still has plenty of room to run near term.
There are a couple of reasons behind the run but, primarily, it is the above-mentioned increased availability of the company’s ADA coin that has created the current frenzy. When a token is listed on the exchange, it’s a major validation of the technology that underpins it and traders and investors rush to pick up an exposure to the token based purely on this validation.
Bittrex, generally regarded as the largest and most reputable exchange in this arena, just added a pairing between ETH and ADA, meaning traders can now pick up a direct ADAETH position. That’s a big deal and one that’s only limited to a handful of the top cryptocurrencies in the space. Subsequent to this listing, ADA also made it into the top 10 cryptocurrencies by market cap as per this list on CoinMarketCap.com, which has served to compound the recent speculative inflow of positive volume and has pushed the coin up further against its major counterparts – BTC, ETH etc.
So what are we looking for going forward?
This is a three pronged entity being run by what’s called the Cardano Foundation (similar in concept to the Bitcoin Foundation), Input Output HK (IOHK), which was initially engaged to design and implement the Cardano blockchain and is still on board, and Emurgo, which is a sort of incubator type entity that’s responsible for fostering commercial applications being built upon the Cardano ecosystem.
Now that the ADA token is in place, the company expects to have a beta of the computational layer of the platform released by the first quarter of 2018, which is where the above mentioned Emurgo will really come into its own. Once both settlement and computation layers are live, users will be able to set up a custom environment to build decentralized applications on the Cardano stack, meaning this first quarter milestone could be a real upside driver for Cardano and – by proxy – ADA as and when it hits.
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Image courtesy of Cardano.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.