The ADA token of Cardano surged by 64% on a recent Monday, following an unexpected announcement from the U.S. government regarding the establishment of a strategic crypto reserve. This reserve will include ADA, along with other prominent cryptocurrencies such as XRP, Solana (SOL), Bitcoin (BTC), and Ethereum (ETH).
This significant policy shift revived investor excitement and enabled ADA to surpass Dogecoin (DOGE), claiming the title of the eighth-largest cryptocurrency with a market cap exceeding that of its rival. As of the announcement, ADA was trading at $1, reflecting gains of 53% and 37% over the past day and week, respectively. This surge can be seen as a recovery from a challenging February, as the announcement provided a fresh impetus for growth.
In the statement shared on social media, the government described the crypto reserve as a response to what it perceived as “corrupt attacks from the Biden Administration.” The statement emphasized the intention to elevate the cryptocurrency sector following years of negative treatment, aligning with an Executive Order on Digital Assets to move toward a strategic crypto reserve.
The announcement was quite surprising for the market, as earlier discussions about government-held cryptocurrencies had mainly focused on Bitcoin. As a result, the broader crypto market reacted positively, yet Cardano notably emerged as the standout performer, with its price climbing from $0.64 to $1.13. This marked the highest level for ADA in over a month, following a tough period characterized by a downtrend.
The decision to include multiple cryptocurrencies in the reserve indicated a substantial shift in policy and presented Cardano with an opportunity to regain lost ground. Just before this news broke, ADA had experienced a decline characterized by lower highs and lower lows, but the announcement reversed this trend, allowing it to surpass Dogecoin in market capitalization.
Large institutional investors, commonly referred to as “whales,” acted quickly in response to the announcement. Reports indicated that these big players collectively acquired over 270 million XRP and approximately 200 million ADA within a span of just 24 hours, demonstrating strong confidence in the assets included in the reserve.
This influx of investment suggests a bullish outlook for the cryptocurrencies selected for the U.S. reserve. However, it also brings a cautionary note regarding potential short-term volatility, as ADA’s relative strength index recently entered overbought territory. Historically, situations like this can lead to temporary price corrections before a subsequent upward trend begins.
Attention has now turned to upcoming events, particularly a planned White House Crypto Summit. If the government continues to show support for digital assets, there’s potential for persistent growth in ADA and the other cryptocurrencies in the reserve, with some analysts speculating that ADA could eventually reach the $10 mark in the future.
In summary, Cardano’s ADA has gained significant momentum following a pivotal announcement regarding its inclusion in a strategic crypto reserve alongside other major cryptocurrencies. The rapid positive response from investors and institutions highlights the growing belief in the future of crypto assets within the U.S. regulatory landscape. The upcoming summit may serve as a critical indicator of how digital assets will be embraced moving forward.