Cardano seems to be emerging as a slight winner as the cryptocurrency does not have large allocations in the portfolios of “hugely secretive” and insolvent hedge funds, unlike other cryptocurrencies. As a result, big liquidation events are unlikely to happen to Cardano as the general public, not the banks, hold it. Panic liquidations are also unlikely as those who would have panicked have already exited. This leaves Cardano minimally affected by any similar events, while other cryptocurrencies such as Solana and Bitcoin experienced market crashes.
Cardano Emerges as the Slight Winner Due to Lack of VC Money
Cardano seems to be walking away from the recent market volatility as a slight winner, mainly because it doesn’t have as much VC money or hedge funds as its competitors. Unlike platforms such as Solana, Cardano doesn’t have large Ada allocations that can lead to panic liquidations during big market swings.
Less VC Money
One of the reasons Cardano is faring better during the current market turbulence is that it doesn’t have a bunch of Venture Capital money backing it. VC money typically acts as an investment in a startup, and the owners of such funds expect high returns on their investments. However, this also leads to high expectations and impulsive decisions based on short-term gains, which is not good for a long-term project like Cardano.
Fewer Hedge Funds
Insolvent hedge funds are also a result of massive investments being diverted into short-term gains. Hedge fund managers, guided by market trends and predictions, are likely to make impulsive decisions during market swings, leading to fund insolventcies that drag down entire markets. However, Cardano has fewer hedge funds investing in it, which buffers it during such financial downturns.
Small Ada Allocations
Unlike other platforms, Cardano doesn’t have a massive allocation of Ada in the hands of big banks or VC funds. This means that when market dips happen, people won’t panic and start liquidating their Ada holdings due to a lack of liquidity. This lack of panic liquidation is the biggest reason why Cardano is relatively stable in these financially turbulent times.
In conclusion, Cardano seems to be emerging as a winner in the current market swings. Its lack of VC money and hedge funds, coupled with low Ada allocations, make it resilient to the ups and downs of the crypto market. We can expect Cardano to continue to prosper in the long-term, as it remains secure, transparent, and uncompromising in its quest for a decentralized financial future.