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Why Cardano is Still Holding Strong After Market Crash

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Why Cardano is Still Holding Strong After Market Crash | Crypto Briefing


















Despite the recent market turbulence, Cardano is showing strong support over $1. 


Shutterstock cover by DIAMOND VISUALS

Key Takeaways

  • Cardano’s native token ADA has shown strong support in the $1 to $1.20 range.
  • Investors staking Cardano look to be helping it maintain its support.
  • The strong community surrounding Cardano is also helping to keep people interested despite development setbacks.

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Since Cardano’s launch in 2017, its ADA token has seen wild swings in price. Now that a support level looks to have been established, there are several reasons why Cardano is holding its value.

Cardano’s Strong Support Level

Following a historic run at the start of 2021, Cardano broke past its previous all-time high of $1.18 established in 2018. Since then, crypto markets have experienced a pullback, with Cardano being no exception. Top ten projects such as Ripple were hit hard, with XRP losing up to 70% of its value since April. Polkadot, the 9th largest cryptocurrency by market cap, has fared slightly worse, falling over 73%. 

However, while the ADA token fell with the rest of the market in May, its previous all-time high looks to be acting as support. Cardano has shed less of its gains than other top ten coins since the market peaked, falling only 48% from its current all-time high of $2.47 achieved on May 17. While other projects have slowly declined in value, Cardano has held up in the $1 to $1.20 range. 

Cardano price graph 2021
Source: CoinMarketCap

As the 3rd largest cryptocurrency by market cap (excluding stablecoins), investors frequently regard Cardano as a hedge to Ethereum. When comparing price action, there have been similarities between Ethereum and Cardano since the start of the current bull market. Both tokens spiked in value in mid-May, only to fall back to levels maintained in February and March. However, the reasons for Cardano’s current strength cannot be fully explained by its use as a hedge to Ethereum. 

Ethereum and Cardano Price graph
Source: TradingView

Staking Made Simple 

One possible reason demand for ADA has held up so well is Cardano’s staking model. Rewards consistently sit at 4 to 6% APY and are distributed to stakers every five days. Compared to other Proof-of-Work coins, ADA is simple to understand and more accessible to the average investor. Major exchanges such as Coinbase, Kraken, and Binance allow for one-click staking, making ADA an enticing investment for even casual crypto investors. 

Cardano also offers a lower barrier to entry than its competitors for those looking to run their own validator to stake ADA. Hardware requirements are almost non-existent, with only 4GB of RAM and 24GB of memory needed. In comparison, running a validator on Solana requires a high-grade CPU and a minimum of 128GB of RAM. 

ADA’s apparent support and ease of staking have made it attractive as a lower-risk crypto investment. If investors are confident that firm support has been established, they will likely view ADA’s current 6% APY appealing, even those who do not expect any short-term upward momentum. As investors buy in for the stable return on investment, it creates more demand for ADA, thus strengthening the support in a cyclical relationship. 

When looking at the amount of ADA staked across the network, investors seem to be sticking with Cardano for the long run. The number of wallets staking ADA has maintained a stable floor over the past six months, never dropping below pre-February levels. 

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Cardano's active staking wallets graph
Source: ADApools

Investors running their own staking pools are seeing similar trends. Popular quantitative analyst Benjamin Cowen has noted stable levels of ADA delegation to the staking pools he runs for his community of followers, reasoning that people’s commitment to staking is helping to establish support. 

The final aspect of Cardano’s strong support is its community. Founder Charles Hoskinson regularly engages with the Cardano community via YouTube and Twitter, keeping investors up to date on the project’s latest developments. Like many crypto projects, Cardano has been slow to deliver on promised features such as smart contracts, which are still yet to go live. However, by building a strong and engaged community, the project has successfully held interest from investors. 

Whether Cardano will be able to maintain its position in the future remains to be seen. Technical analysis suggests that while ADA shows strong support, it is also having difficulty breaking out of its current range. Regardless of the short-term price action, it seems Cardano’s supporters are unlikely to leave anytime soon. 

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and ADA. 

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Source: https://cryptobriefing.com/why-cardano-is-still-holding-strong-after-market-crash/

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‘Overlooked’ Part of Senate Infrastructure Bill Renews Worries From Crypto Lobby

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The $1 trillion infrastructure bill, which passed in the Senate in early August and is expected to be approved by the House, is the gift that keeps on giving.

At first, it was about roads, bridges, and clean water. Then a pay-for provision promised to give American crypto users new tax reporting requirements. And now there’s a new twist.

A report published today by the Proof of Stake Alliance (POSA), an advocacy group that counts Coinbase Custody and Solana as members, details an “overlooked” amendment to the tax code within the 2,700-page bill that will make it a felony to incorrectly report receiving cryptocurrencies, NFTs, or other digital assets.

Writing in his role as an advisor to the POSA, law professor Abraham Sutherland details how the infrastructure bill amends Section 6050I of the tax code. The amended section 6045 that caused so much consternation when it made it through the Senate changed the definition of “broker” to cover those handling cryptocurrencies. 

Industry lobbyists and cryptocurrency advocates such as the think tank Coin Center argued that the bill as written would force Bitcoin miners and validators on other networks to file 1099 forms for the people whose transactions they were processing—even though they lacked the personal information needed to do so.   

Section 6050I, on the other hand, deals with the tax reporting requirements of those who ultimately receive the cryptocurrencies. While Americans must already report their crypto gains to the IRS just as they would with other investments, Sutherland says the amended provision goes much further: They must tell the government who sent it, including reporting social security numbers, when the value of the digital assets is more than $10,000. Not doing so within 15 days constitutes a felony.

This raises at least two issues. First, as Sutherland notes, it’s just as unwieldy as the section 6045 amendment: “This provision demands the impossible because the digital assets might not be ‘received’ from a person whose personally identifiable information can be verified and reported—including cases where the digital assets are not ‘received’ from a person or entity with a tax ID number, period.”

Second, as Sutherland alludes to and as Coin Center Research Director Peter Van Valkenburgh hammered home in a blog post, it might just be unconstitutional. The tax code currently mandates that people report such information to the IRS when they receive $10,000 in cash. That passes Constitutional muster because the bank acts as a third party; otherwise, authorities would need a warrant under the Fourth Amendment. But in cryptocurrency, a peer-to-peer transaction doesn’t have a third party

Writes Van Valkenburgh: “One person to a two person transaction is obligated to collect a load of sensitive information from her counterparty and hand that to government officials without any warrant or reasonable suspicion of wrongdoing.”

Though he writes that Coin Center usually doesn’t “object to equal treatment of cash and cryptocurrencies,” in this case the “provision is a draconian surveillance rule that should have been ruled unconstitutional long ago. Extending it to cryptocurrency transactions would further erode the privacy of law-abiding Americans.”

Sutherland also calls into question the process by which the amended IRS code will become law—via a bill on completely unrelated topics. “A statute creating felony crimes for users of digital assets should be debated openly, not quietly inserted into a spending bill,” he wrote.

Source: https://decrypt.co/81236/overlooked-part-senate-infrastructure-bill-renews-worries-crypto-lobby

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Avalanche (AVAX) bumps to near $70 after reveal of $230 million fundraise

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High-speed blockchain Avalanche jumped to highs of $68.30 today after several influential crypto investors revealed the close of a private funding round involving $230 million worth of AVAX tokens in June, CryptoSlate learned in a release.

The Avalanche Foundation, a non-profit that oversees the development of the Avalanche blockchain, disclosed participants in the multimillion-dollar funding round were led by PolyChain Capital and Three Arrows Capital, and included R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, and Lvna Capital.

What happens to Avalanche now?

Proceeds from the private sale will be used to support the burgeoning Avalanche ecosystem—one that has been positioned as a top contender against Ethereum for its high speed and low fees. 

Part of the funds will be funneled to support DeFi (decentralized finance) projects on Avalanche as well as enterprise applications through grants, token purchases, and other forms of investments.

Avalanche’s smart contract is able to execute Ethereum Virtual Machine (EVM) contracts, making it possible for developers to ‘reuse’ their codebase if they have a working/testnet product on the Ethereum blockchain.

Converting assets on-chain using a ‘bridge’—a way for two separate blockchain to communicate with and transfer value between each other—are also simple as applications querying the Ethereum network can be adapted to support Avalanche by changing API endpoints and adding support for a new network. 

Meanwhile, the news caused a surge in AVAX prices last night. The token jumped 30% to over $68.30 to set a new all-time high, reaching a $14 billion marketcap and becoming the 12th-most-valuable cryptocurrency by that metric.

At press time, AVAX continues to trade above its 34-period exponential moving average, a metric used by traders that determines asset trends using historic prices. It has been been in a gradual uptrend since breaking the $15 mark in late-July, and has returned several multiples to investors in the past three months alone.

Image: AVAX/USD via TradingView.

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Source: https://cryptoslate.com/avalanche-avax-bumps-to-near-70-after-reveal-of-230-million-fundraise/

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Can NFTs impact the economic livelihood of artists in developing nations?

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TL;DR Breakdown

  • Aversano deployed the first NFT portrait photography.
  • The total sales volume of NFTs in the art segment rose from $64 million to $774 million.
  • NFTs ensure an artist is paid royalty whenever their art is used.

As of July 2021, the NFT industry had garnered an estimated $2.5 billion worth of sales compared to only $13.7 million during Q1 and Q2 of 2020. 

Aversano, an artist known for deploying the first-ever NFT portrait photography, says he sold more than 100 NFT portraits between February and June. He said the sales earned approximately $130,000 within five months. The Twin collection in which he sold the 100 portraits are photographs of twins, which he says are in memory of his fraternal twin.

What are NFTs?

NFTs are non-fungible tokens which are real-life assets that are sold on digital platforms. The viability of NFTs depends on the uniqueness and the utility of possession. This means that tokens can only be relevant to an owner if he can prove ownership of the token. The tokens can range from unique pieces of art from artists to current assets like cars. The digital platform gives an easy and availed proof of ownership.

Non-fugitive assets are made more desirable by the fact that they are unique and one of a kind. This makes them very valuable.

According to Statista, the total sales volume of NFTs in the art segment rose from $64 million to $774 million within a record period of 30-days (August 15 – September 15, 2021). The chart below shows the fluctuation of NFT sales per 30-days period between April and August. 

NFTs sales
NFT sales volume between Apr-Sept by Statista

How can NFTs make artists’ lives better?

As the digital world takes significant steps ahead, more investors try to get a niche to explore the same fruits. When Jack Dorsey sold his first tweet at $2.9m, it started a buzz on and around NFTs. Not only for the amount of money fetched but the ‘absurdity’ of buying a tweet when there are millions of them already. However, there is much more to it. It brought about the concept of owning a one-of-a-kind piece of art which for sure is an advantage to artists.

First, NFTs guarantee immutability to the artist. There is uniqueness where the artist has complete copyrights on his art. This is enabled by the ID or metadata issued to an artist to prove possession of the art. It is offered to give essential data about the piece of art. 

Second, there are no intermediaries during the trading of art on cryptocurrency platforms. Once there is an interested party, they are connected to the individual artist who lays out the asset’s guidelines to change possession. This is advantageous to the artist since transactions are done on his terms. It also keeps in place his profile and reputation as an artist. The artist also cuts the marketing cost and the issue of art brokers.

Next, there is exposure for the artist. When trading NFTs, artists are at ease to do collaborations with other artists. This is a guarantee as the platform is a haven where artists can interact and flourish while teaming up with even more significant expertise in different fields. Apart from collaborations, there is a world market availed. Geographical borders or any particular divisions do not limit the crypto platforms. Once an artist avails art on a digital platform, the piece is available for everybody.

One other factor pulling artists to NFTs is smart contracts. This is a feature that keeps a contract in code form. It works best for decentralized platforms. Smart contracts are programmed to suit an investor’s interest in trade.

For example, smart contracts can be used by artists dealing with NFTs to store data or be used to get royalties each time the piece of art changes possession. This means that the artist keeps reaping from the art long after the sale. A smart contract can be programmed to work without involving a party to set it up time and again.

On the other hand, since the buzz around NFTs began, more people are trying to get into the trade in an attempt of minting. This is leading to flooding in the market and the uniqueness of NFTs diluting. However, this is not a guarantee for the near future failure of NFTs. Artists can reap much from the NFTs.

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