It's the time that many Cardano fans have been waiting ages for; the Shelley mainnet has officially launched! This protocol upgrade has changed Cardano into a decentralized blockchain, bringing along with it the ability to stake your ADA, and many other changes.
But most people, including me were expecting the price of the coin to move up even more, but surprisingly on the day of the Shelley launch, the price actually dipped. But why?
There are 3 possible reasons for this in my opinion that could explain it. So without further delay, let's dig into those possible reasons.
- Bitcoin
Just a few days leading up to the launch of Cardano's Shelley, the coin was actually surging in price. It had gone from around $0.12 to $0.15, a very nice price increase. With this increase, many people were wondering where the price could find itself when Shelley actually did launch. With my own projections I was expecting the price to rise up to around $0.17 on the day that the upgrade was performed. But that was all before an unexpected move in the cryptomarket happened. Bitcoin finally woke up this week and had a giant surge in price, going from the low $9,000s to a high of around $11,400. During this time, and bitcoin was acting like a magnet that was absorbing all of the money from the rest of the altcoins, including Cardano. Like I said, before Bitcoin had made its move, Cardano was in deep green, moving up fast, but as soon as bitcoin shot up, the increase of Cardano immediately halted and went negative. If you are a fan of Cardano, you could think that this was very unlucky timing. If only bitcoin's price would have gone up just a few days later, we could have seen a bigger increase in the price of ADA, but we will never really know what could have been.
But I'm not too worried about this. If you have been around in the crypto market for a while, you will already know how the bull markets run. First there is a pump in the altcoins, which then goes into Bitcoin, which then goes back into the alts. So while Cardano is currently not moving, this time next week could be a completely different story.
- Buying on the News, Selling on the Actual Event
This happens all the time in the finance world. Look no further than a company like Apple. Where there is a new possible rumor, or announcement, many times the price of Apple stocks will go up. But when the product is actually released, there is little movement in the price, and sometimes it goes down. Sometimes the news of it can just be more exciting. Fans of Cardano had been waiting years for the released date of Shelley to be announced, and when it was the price of ADA rocketed up. Just around 2 months ago, Cardano was priced at around $0.05, which means we have already seen an increase by 3X during this time. And to be honest the news is sometimes more exciting. The endless speculation that it can offer, and the adrenaline rush that you can feel when the news has officially been unveiled is amazing. But on the launch day nothing really exciting happened. Just that we were told that Cardano was live, it's not something that you can really see or touch like a new iPhone release. Although it did bring Staking.
It also could be said this was all of the price movement that the release of Shelley could have offered and the price had already went to its limit. Again we will never really know, because this was such an unusual week, but I suspect that the real reason could be a combination of all 3 of these possible theories.
3)The 1st Staking Rewards Day Will be the Real Price Mover
This is another possible theory I have been seeing across the internet. Once more and more ADA is locked up in staking, this will cause the coin to become more scarce and therefore the price will increase. While technically staking has already began, currently you can only do this on the Daedalus wallet. But within a week you will be able to stake on the Yoroi Wallet, and very soon the Atomic Wallet, and possibly exchanges. The key point here is that it needs to come to exchanges to really affect the price and move mainstream. People really into crypto will be able to download the specific wallets they need to begin staking, but a regular person would be better suited for this to come to Binance, Coinbase and many other exchanges. Once this does, I could see it having a great effect on the price of ADA.
There are many things to be bullish about in regards to the future of Cardano. We did finally just see the release of the long-awaited Shelley. Staking is live. There are rumors that ADA will soon be listed onto Coinbase, which would have a fantastic effect on the price as well. Not only that, but there are more updates for the protocol on the horizon. Goguen will bring with it the ability for Cardano to have smart contracts, and there are more updates planned after that.
Then also we need to consider the market situation. All signs are pointing to this being the beginning of the bull market. During the last bull market the price of Cardano went up to $1.33, and that was when Cardano was practically just an idea. But now that it has officially launched, how far could the price go during this bull market?
Either way, it is an exciting time, and I cannot wait to begin staking my Cardano and get that extra passive income.
What are your thoughts? Why didn't we see a price increase of Cardano on Shelley's release day!?
As always, thank you for reading!