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Cardano, a blockchain project led by highly regarded cryptographers and IOHK, has recorded massive gains over the past two days.
Within the past 24 hours, the price of ADA, Cardano’s native token, surged by more than 130 percent, from $0.22 to $0.52. The market valuation of Cardano surpassed the $13.5 billion mark, surpassing Dash and IOTA, nearing that of litecoin.
Factors of Recent Price Surge
Earlier this month, CCN reported that the price of Cardano increased by more than 400 percent within a week because of the integration of ADA by leading exchanges including Bittrex and Binance.
According to CoinMarketCap, Bittrex is the largest cryptocurrency exchange in the global market with a $2.8 billion daily trading volume. The integration of a relatively new cryptocurrency by major markets like Bittrex and Binance immediately expose and introduce the global cryptocurrency exchange market to that particular cryptocurrency.
Specifically, the integration of Cardano by Bittrex expanded the potential market of Cardano to the entire trading platform and user base of Bittrex, providing immediate boost in liquidity. Prior to the integration of ADA by Bittrex, the Cardano blockchain platform garnered the attention of the cryptocurrency market with its proof-of-stake (PoS) consensus protocol.
Currently, several leading cryptocurrencies such as Ethereum are actively investing the possibility of integrating PoS consensus protocol through innovative solutions such as Casper. As such, the base PoS protocol of Cardano triggered the interests of Ethereum supporters and PoS enthusiasts.
Charlie Lee Concerned
Earlier today, on December 17, Litecoin creator and former Coinbase executive Charlie Lee publicly expressed his concerns over the sudden price surge and rally of Cardano. He wrote:
“I just noticed Cardano (ADA) is #6 on CoinMarketCap. How did it become a $10B coin when it’s only 3 months old and the only major exchanges trading it is Bittrex and Binance and without even any fiat trading pairs? Either the market is crazy or Cardano will end world hunger.”
Lee emphasized that Cardano’s market cap does not represent its true value, given that the project is less than 3 months old. More to that, it is important to question the value of cryptocurrencies and blockchain networks based on their user bases and actual use cases. In the case of Cardano, is its blockchain network demonstrating the user base and usability of a $14 billion network?
“To be clear, I have nothing against Cardano or its tech. And I have a ton of respect for Charles Hoskinson and I’m sure the project has a ton of potential. But at 10B valuation right now, how can that possibly be a good value,” added Lee.
In the cryptocurrency market, a bull run or a strong rally is almost always followed by a bear cycle, especially if the market cap of a blockchain network is difficult to justify. The market valuation of Ethereum for instance was also criticized by experts over the past few months because its decentralized applications and ecosystem are struggling to achieve commercial success, despite being on a $69 billion network.
With any cryptocurrency, it is crucial to question the market valuation of its blockchain network and whether the current market cap can be justified with a wide array of indicators, such as user base, applications, and user activity.
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The post Cardano Surges by 145% in 1 Day, Charlie Lee Questions Value appeared first on Crypto Currency Online.
source https://cryptocurrencyonline.co/cardano-surges-by-145-in-1-day-charlie-lee-questions-value/
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