Cardano (ADA): New Developments and Potential Growth Outlook - COINTURK NEWS
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Cardano (ADA): New Developments and Potential Growth Outlook

10:44 am (147 days ago)
July 11, 2023

Cardano (ADA), one of the largest PoS networks, has not performed as expected this year. There are two main reasons for this: the excitement over network upgrades fading and what can be dubbed as the negative influence of Hoskinson. However, the upcoming update may push the price up, just like the previous two updates did.

Cardano (ADA)

Cardano developers recently introduced Hydra Pay, a new layer2 payment and instant settlement product. Past on-chain data indicates that if the product is well-received by the community, the ADA price could double. In mid-January 2023, Cardano launched the Djed algorithmic stablecoin on the local test network. Following the mainnet launch in February, Cardano whale transactions increased by 400% instantly. And within three months, the ADA price gained 40% in value, reaching its 2023 peak of $0.46 on April 16.

The situation was slightly different with DJED. Just to give you a bit of information, the collateral for the stablecoin (overcollateralized algo stablecoin) was going to be ADA Coin. This led to the assumption that the ADA price would increase, similar to the relationship between LUNA and UST, if there was increased demand for the new stablecoin. Investors were not wrong, but because DJED did not see the expected demand, its impact on the price was short-lived. In the future, if the demand for DJED increases, could it cause a larger demand explosion? Time will tell, but if it happens, the price could rise rapidly.

ADA Coin Comment

Transactions with Cardano (ADA) Hydra Pay will be made in ADA Coin. If everything goes as planned, Cardano transaction volumes could increase significantly, triggering a price increase. As can be seen below, the recent marginal increase in ADA Transaction Volume triggered a slight price increase in July. On July 1, Cardano owners traded with a total of 7.32 billion ADA coins. And by the close of July 9, this number increased by 7%, reaching 7.85 billion ADA.

If a product like Hydra Pay has the potential to expand the range of services offered by Cardano, demand for ADA could increase rapidly. As seen above, ADA recorded a 3% price increase between July 6 and July 9, showing early signs of what could happen if Hydra Pay is well-received.

Furthermore, the “Hydra Pay” specifications also state that users will need to deposit funds in a smart contract before transacting. If it garners interest, the increase in ADA staking transactions could inadvertently reduce the supply on crypto exchanges. As can be seen below, the total of crypto exchanges’ Order Books shows that ADA demand is already outpacing exchange supply.

In an optimistic scenario, price targets of $0.35 and $0.5 seem reasonable. On the contrary, the price could continue to hover around the $0.25 region in an adverse scenario.

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