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Cardano (ADA): From the Perspective of an Institutional Investor

CryptocurrencyJul 07, 2021 07:30AM ET
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Cardano (ADA): From the Perspective of an Institutional Investor

  • Institutional investments in Cardano have risen steadily over the last few months.
  • The reason for the increase of institutional interest can be linked to environmental sustainability and technological advancements made in the network.
  • Cardano has entered into a series of high-profile partnerships with COTI and Lykke, and the establishment of a Cardano Trust indicates a further influx of funds into the network.
  • Cardano recently reached its all-time high of $2.46 amid dwindling fortunes in the cryptocurrency sector.

Cardano has had a stellar 2021 following a strong performance in its prices and a series of impressive milestones. This run of form formed the basis for institutional interests for the network as investments poured in.

In particular, May marked a significant spike in the number of institutional investments into cryptocurrencies as institutions are cognizant of the environmental sustainability of projects.

Cardano’s Increasing Institutional Investments

Cardano has been stacking up institutional investments over the last few months, with $20 million worth of investments since the start of the year.

May proved to be a good month for the cryptocurrency as it saw the highest weekly inflow of funds from institutions.

A record high of $10 million was poured into Cardano following a decline in interest in BTC and ETH. In comparison, the week in review saw huge outflows from BTC and ETH of $110.9 million and $12.6 million respectively.

Recently, Cardano struck a series of high-profile partnerships with top players in the industry. In July, it entered a partnership with Lykke Corp, a Swiss blockchain firm. Before that, Cardano struck another partnership with COTI to act as a payment gateway provider for Cardano.

Grayscale’s announcement of the Cardano Trust was received with positivity as it opened Cardano to even more institutional investors.

Why is Cardano Appealing to Institutional Investors

Several reasons can be deduced for the institutional interests in Cardano. Most prominent is the environmental sustainability that Cardano offers as it uses a proof-of-stake model.

Environmental discussions came to a head following Elon Musk’s decision to stop Tesla (NASDAQ:TSLA) from accepting Bitcoin due to high energy consumption and climate concerns plaguing the mining process.

Institutional investors turned to Cardano, hailed as a “green coin” by cryptocurrency experts. Big money flowed out of Bitcoin into Cardano that led to the asset reaching an all-time high of $2.46.

Furthermore, technological advancements like the Mary hard fork and the Alonzo upgrade have introduced smart contract functionalities, making them appealing to investors.

On the Flipside

  • Mike Novogratz, CEO of Galaxy Holding has referred to Cardano as a “weird cult”
  • In the interview, Mike Novogratz also stated that he finds the valuation of Cardano shocking
  • Cardano’s founder, Charles Hoskinson replied to Novogratz’s statement saying that the billionaire is irked at not seeing a way to get in at a favourable price or “manipulate the market.”

Cardano’s Metrics

The flow of institutional investment and high-profile partnerships has resulted in positive support for Cardano. Amid severe bearish sentiment in May, Cardano remained bullish and forged ahead to reach an all-time high of $2.46.

Presently, Cardano is ranked as the fifth-largest cryptocurrency in terms of size, with a market capitalization of $42 billion and has gone on to celebrate the milestone of over 1 million wallets.

Cardano has a max supply of 45,000,000,000 ADA and out of this number, 31.9 billion ADA are in circulation. It is impressive to note that $31 billion worth of Cardano is staked in over 650,000 staking addresses.

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Cardano (ADA): From the Perspective of an Institutional Investor
 

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