This past week has been a relatively incredible one for Cardano (CRYPTO:ADA). Investors in this top proof-of-stake cryptocurrency have seen the valuation of this token take off in impressive fashion. Of course, in recent days, this momentum has waned, alongside equities and other digital tokens.
However, investors may certainly be intrigued to know why Cardano is outperforming most of its peers.
Let’s dive into the key drivers behind this project of late.
Cardano’s inclusion in Grayscale Fund
Institutional investment in any asset class is a key driver. For crypto, this is no exception.
Cardano has been a key beneficiary on this front. This past week, Cardano tokens took off following an announcement that Grayscale would be launching a smart contract fund. As it happens, Cardano received the largest percentage holding in this fund at a 24% weighting.
This is a pretty significant vote of confidence in the smart contract platform. Indeed, this puts Cardano even more on the map for those who may have ignored this platform thus far. Large institutional investors are generally perceived to know what they’re doing. And right now, the smart money is moving into Cardano.
Coinbase enables Cardano staking
Another key factor Cardano investors have been focused on is the staking aspect of this token. As a proof-of-stake network, Cardano’s blockchain is secured and validated via staking. This means holders of ADA tokens can put their tokens up (stake them) and earn returns for doing so.
Notably, Crypto exchange Coinbase announced the crypto company would be expanding its offerings to include staking. Cardano would be among the first blockchains focused on as part of this new offering.
For investors looking to earn passive income via their crypto holdings, this is a big announcement. Right now, investors can earn 3.75% in terms of yield on holding Cardano in their portfolio. Aside from capital-appreciation upside potential, this is a very meaningful return for most.
Bottom line
There are a lot of moving pieces with a cryptocurrency like Cardano. Indeed, this network is among the highest-profile and highest-quality crypto options out there for investors. These catalysts only amplify this network’s value for investors in the near term.
Over the longer term, risks remain prevalent. Accordingly, investors ought to manage their holdings, including Cardano, with care.
That said, I think these headlines are a big deal. Indeed, Cardano certainly is one of the best options for long-term investors looking at crypto for the first time, in my view.
