Author: Nancy, PANews

Weathering the ups and downs of the crypto market cycle, the veteran public chain Cardano has always been able to give itself a BUFF boost, breaking through the market. In this cycle, the old Cardano has been rejuvenated, anchoring the Bitcoin L2 narrative, and has recently appeared frequently in the form of a US crypto reserve asset, an ETF application target, and a popular choice for institutional allocation, with a high profile.

Ecological indicators are crushed, and policy BUFF is accused of being arelationship

On March 2, Trump announced in a post that his digital asset executive order directs the President's Working Group to advance a crypto currency strategy reserve including BTC, ETH, XRP, SOL and ADA. However, this news was not entirely unexpected. At the end of January this year, Ripple CEO Garlinghouse confirmed that he had discussed the possibility of using XRP as a US strategic reserve asset with Trump, and emphasized that the diversification of the reserve should be ensured. It now appears that this chess game has already begun to be laid out.

Stimulated by this news, the crypto market "came back to life" overnight. Among them, Cardano's ADA performed particularly eye-catching, with CoinGecko data showing that its 24-hour peak increase exceeded 78.1%, directly topping the hot search list. However, in addition to the high market sentiment, there are also doubts: Cardano's technical strength and ecological development are slightly inferior to the other selected assets, so why was it selected as a US reserve asset?

Cardano holders have a relatively high long-term holding intention, with more than 60% choosing to lock up to support the network, which also increases the health of its network. According to data from the staking data website Staking Rewards, Cardano is the fourth largest POS blockchain network, with a staking amount of $23.34 billion and a staking rate of 60.1%.

However, according to DeFillama data, as of March 3, Cardano's TVL was close to $508 million, the on-chain stablecoin market value was $22.55 million, and the application revenue in the past 24 hours was only $3,024. During the same period, Solana's TVL reached $8.38 billion, with a daily revenue of about $836,000. From the perspective of ecological indicators, Cardano is relatively lagging behind among the selected assets, and although the staking scale is amazing, the staking of ADA has not been translated into actual dApp applications, which means that its ecology still has a large blank area to be filled.

"So does this mean we have to change our name to 'US Digital Assets'?" Cardano founder Charles Hoskinson joked in his latest tweet.

In fact, the outside world has always referred to Cardano as the "Japanese public chain", but Cardano is an American-made project, founded by the American Charles Hoskinson, who was one of the original eight co-founders of Ethereum. He has invested a lot of money and energy in the fields of blockchain, longevity science, and space exploration. In 2014, Hoskinson left Ethereum due to differences with Vitalik Buterin on the development direction of the product, and founded Input Output Global, headquartered in the US, and launched Cardano. The reason why Cardano is so popular in the Japanese market, even being called the "Japanese Ethereum", is largely due to its early financing model. It is reported that nearly 95% of the buyers in Cardano's public offering came from Japanese investors, and it was also called "retirement investment", mainly because this public offering was led by the Japanese company Emurgo, and at that time the regulatory environment in Japan was relatively loose compared to Europe and the US, which also led to Cardano being mistaken for a Japanese project. But with the gradual opening of US crypto policies, Cardano is gradually fading its Japanese impression.

As for the market's guess about Cardano's selection as a strategic asset reserve, many people suspect that it is not based on technology, but on the close connection it has established with the US government, especially as the founder Charles Hoskinson has hinted several times. For example, in November 2024, when Hoskinson was rumored to be considered by Trump for appointment as a crypto policy advisor, he revealed in a conversation that he had a close relationship with a member of Trump's team. He said he would work with lawmakers and the government to push for the passage of a bipartisan bill. Input Output Global, Cardano's development company, plans to establish a crypto currency regulatory policy office in early 2025 and plans to contact "some key leaders" in the US government to promote the legislative agenda related to crypto currencies and securities and commodities. However, as of now, the specific progress of this plan has not been made public, and there is no evidence that he has been formally employed by the US government.

Charles Hoskinson also clarified on March 2 that "no one was appointed to a crypto-related role by the executive branch tonight, the meeting does not mean recognition or conferring magical new powers, the legislative process is like this, it takes time and effort. I will not comment on this topic again until there is exact and substantive news about the legislative process, this news must be related to the formulation of new laws to enable this industry to survive and thrive in the US."

From academic to Bitcoin sidekick, Cardano'smultiplenarrativescling to hot spots

Flowing narratives, solid Cardano.

Recently, Cardano's multiple market dynamics have made it one of the hottest targets of market attention. For example, ADA is one of the top three assets in the latest holdings of the Grayscale Smart Contract Fund, accounting for 18.23%; Grayscale's Cardano spot ETF application has been accepted by the US SEC; Cardano plans to integrate Ripple's RLUSD stablecoin to enhance its DeFi ecosystem and provide broader use cases for RLUSD.

And not long ago, Charles Hoskinson also revealed that Input Output Global (IOG) will focus on developing the Bitcoin DeFi ecosystem in 2025. The team plans to collaborate with multi-party computation protocol developer Fair Gate Labs, with the goal of launching a demo version before the Bitcoin conference in May 2025. The technology developed by Fair Gate Labs will become the foundation of BitcoinOS, and no additional tokens will be issued, with cross-chain transactions only requiring Bitcoin. The project will also collaborate with community projects and wallet service providers to achieve the goal of "awakening the sleeping giant".

This time, the bonus of the strategic reserve policy has undoubtedly brought additional policy support to Cardano, and also provided it with new capital flows and attention in the market.

Looking back on Cardano's development history, in the past few market cycles, Cardano has always been good at building eye-catching narratives to shape a unique market image, and to increase market attention by leveraging external events.

From starting as a "research-driven third-generation blockchain" to becoming the "green Ethereum killer" with the environmental card, and then to the ecological moment of smart contract launch, it has now transformed into a new role as the "Bitcoin Layer2". These narratives are not always completely based on the technology itself, but more often driven by external events and public opinion. Especially in bull market cycles, its potential is often amplified, and it can quickly become the focus of market attention with its strong pull-up ability.

However, from the initial academic to the current Bitcoin "sidekick", although Cardano has been quite successful in the evolution of its narrative, the actual application problems behind it are still its biggest weakness. With the boost of the "US policy tailwind", whether Cardano can break through the inherent impression of the bull market limited illusion remains to be seen.

Accused of beinga piece of paper, the execution path is a mystery

However, regarding the inclusion of altcoins such as ADA in the strategic reserve assets by Trump, in addition to the suspicion of interest transfer, the specific implementation methods, timetable, scale and funding sources are still unclear, and the market believes that it is more in the intention stage, and the execution is a mystery. (Related reading: Trump Announces Crypto Currency Reserve Plan: 5 Assets Selected, But Accused of "Advertising Slot", Implementation Uncertain)

Taproot Wizards founder Udi Wertheimer believes that "the best view of strategic reserves I've seen so far is that this is just a typical Trump negotiation tactic. To truly establish reserves, Trump must convince Congress, he cannot decide alone. Whenever Trump needs to convince other stakeholders, he always starts with an absurd claim, which he can then take back later. So, in Trump's chess game language, this just means he's telling Congress that if they don't agree to a Bitcoin reserve, I'll propose even more outrageous conditions."

BitMEX co-founder Arthur Hayes pointed out, "There's nothing new here, just empty talk. Tell me when they get Congressional approval to borrow money or raise the price of gold. Without that, they have no money to buy Bitcoins and Altcoins."

"Investing in just Bitcoin may be the best choice - the simplest, and with a clear logic behind it as the successor to gold; if people want more diversified options, they can construct a market cap-weighted Altcoin index to maintain their impartiality," said Coinbase co-founder and CEO Brian Armstrong.