ADA price has dropped by over 42% from its highest point in November last year, in a trend that mimics other altcoins. Cardano is trading at $0.759 at press time, with its market cap at $26 billion. This article explains what would happen if one of Cardano’s top catalysts fails to gain traction.
Cardano is Betting on Bitcoin Integration
While the Cardano price has crashed, there are signs that some investors believe it will bounce back soon. As shown below, Cardano whales have continued to accumulate the token. This accumulation is more pronounced among holders of between 10 million and 100 million coins, who now hold almost 13 billion coins.
One reason investors are buying Cardano is the partnership with BitcoinOS, which was announced in October last year. This deal will introduce a trustless Bitcoin bridging using zero-knowledge technology and let Cardano act as the DeFi layer for Bitcoin.
Most importantly, the technology will allow Bitcoin staking without using intermediaries. In the announcement, Cardano said that the deal would unlock the network’s $1.3 billion in liquidity, which has now grown to over $2 billion because of the ongoing Bitcoin surge.
Recently, Cardano and BitcoinOS demonstrated that the technology is promising. BitcoinOS transferred 1 BTC to Cardano as xBTC using cryptographic proofs. The whole transaction took just a few seconds to conclude.
Cardano and its proponents hope that the successful integration of Bitcoin in Cardano will dramatically boost its DeFi TVL from $400 million to billions.
ADA Price at Risk if Bitcoin Integration Fails
The risk, however, is that the technology may not achieve the desired outcome. One reason is that Bitcoin staking, one of the goals of this technology, already exists.
Some top players in Bitcoin staking are Babylon Protocol, Lombard Finance, and Solv Protocol. These DeFi platforms use different approaches to generate returns, with Babylon allowing users to earn while still holding their coins.
In addition to these, there are chains like Stacks and Core, which have $214 million and $778 million in assets, respectively. These chains help developers build applications powered by Bitcoin and have staking features.
Therefore, while Cardano’s integration with Bitcoin may become successful, the TVL may be smaller than expected. This risk exists because technology already exists that lets users stake Bitcoin and use it in their transactions.
Cardano Price Prediction if BitcoinOS fails
One thing about Cardano is that it has done well over the years, even though it is a ghost chain. For example, DeFi TVL costs just $400 million, while the network’s stablecoins cost just $30 million. These are small numbers since Cardano has a market cap of over $26 billion.
For example, Arbitrum has a TVL of over $3.2 billion and a fully diluted valuation of over $4 billion. The same applies to other cryptocurrencies like Sonic, Sui, and Aptos.
Still, this is not to say that the ADA price is about to crash. The weekly chart shows that the Cardano token has formed a bullish flag pattern on the weekly chart, a popular continuation sign.
Therefore, the coin is likely to bounce back and possibly reach a high of $2, 167% from its current level.
