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Cardano’s (ADA) links to ETH will see it through a crypto winter

By Monte Stewart

Edited by Aaron Woolner

09:40, 16 June 2022

Winter in a spruce forest, spruces covered with white fluffy snow
Cardano’s (ADA) links to ETH will see it through a crypto winter - Photo: Shutterstock

Cardano (ADA) may be trading way short of its all-time high but the project's strong links to the Ethereum blockchain mean the altcoin's price is well placed to survive a crypto winter.

At the time of writing, cardano was trading just shy of 50 US cents, a long way from ADA’s all all time high of $3.10 in September 2021 but in line with the broader cryptocurrency market.

However, the involvement of one of ETH’s  founders Charles Hoskins in cardano should prove critical, according to one digital asset manager. 

Cardano to US dollar

Andrew Durgee, head of Republic Crypto, the asset management arm of Republic and its Republic Crypto Fund, suggested that cardano could benefit from its founder’s popularity.

“Cardano comes from [founder] Charles Hoskins, who’s one of the founders of ETH and [Cardano] is one of the chains that he’s really been focused on post-Ethereum,” Durgee said in an interview with Capital.com. 

“The original Ethereum founders, outside of Vitalik [Buterin], have really gone on to start to do their own things and start to move away from Ethereum. 

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Vasil hard fork

“So those particular individuals carry a lot of fanfare and interest.”

This point is particularly critical ahead of ADA’s long awaited blockchain network upgrade called the Vasil hard fork at the end of this month. 

But Durgee indicated that he expects cardano to depend on bitcoin for help getting through the crypto winter which, he added, differs from others because it is occurring in a bear market.

ETH/USD

3,338.22 Price
+8.140% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

ADA/USD

0.88 Price
+8.680% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00646

XRP/USD

1.39 Price
+24.300% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

BTC/USD

98,968.30 Price
+4.530% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Ethereum to US dollar

“Most of the market has some form of parity to bitcoin, right?” he said. “It's gonna follow bitcoin pricing more so than anything else, and I'm of the opinion that bitcoin is here forever. 

“We are of the belief that bitcoin doesn't really need anything else to survive but everything needs bitcoin to survive. 

Doubtful of DOGE

"If bitcoin were to fail, the party's over. If some of the others were to fail, bitcoin will continue on. So with that thought process, I think it will be very difficult for the rest of the industry to decouple itself from bitcoin.”

Durgee suggested that Dogecoin (DOGE) will not be able to grow on its own merits.

Dogecoin itself seems more of a meme,” he said. “There’s not a lot of intrinsic value on it. It’s something that has an interest based on the crowd.”

DogeCoin to US dollar

Durgee’s positive take on cardano’s outlook was reflected in Thursday morning trading in Asia as the price surpassed $0.51. 

The coin soared 11% over a 24-hour period, outperforming bitcoin, which gained about 7% and ether (ETH), the coin backed by the Ethereum blockchain network, which rose about 6%, according to CoinMarketCap.

BNB and Dogecoin’s prices also continued to rise.

Markets in this article

ADA/USD
Cardano / USD
0.88198 USD
0.07033 +8.680%
ETH/USD
Ethereum / USD
3338.22 USD
250.69 +8.140%
DOGE/USD
DogeCoin / USD
0.3960698 USD
0.0187129 +4.970%
BNB/USD
Binance Coin / USD
642.63 USD
24.23 +3.970%
BTC/USD
Bitcoin / USD
98968.30 USD
4280.75 +4.530%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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