Here's why Cardano's token is jumping today

It's been a wild year for ADA, and the cryptocurrency is still up more than 800% in 2021.

Piggy bank rocketing.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Cardano's (CRYPTO: ADA) ADA token is gaining ground amid rebound momentum for the broader cryptocurrency market. ADA was up roughly 7.3% over the previous 24 hours as of 3 p.m. ET.  Bitcoin was up roughly 5.6%, while Ethereum's ether token had climbed 6.5%. The cryptocurrency market got hit hard last week as investors focused on the emergence of a new coronavirus variant dubbed omicron, but market sentiment appears to be shifting again. Many major crypto tokens are posting big gains on Monday, and Cardano's ADA token is participating in the pricing rebound. 

So what

With the new coronavirus variant creating a fresh source of uncertainty last week, investors moved out of high-risk cryptocurrencies and stocks, and Cardano and many other leading altcoins suffered steep valuation pullbacks. Cardano's sell-off last week was especially pronounced because eToro also announced that it would start limiting trading of ADA and TRON's TRX token for U.S.-based users of its trading platform, prompting significant sell-offs for each of the tokens.  Crypto investors seem to have digested the risks posed by the omicron variant, and ADA's valuation is climbing thanks to the shift in sentiment. However, even with the recent recovery, the token is still down roughly 10% over the last seven days. 

Now what

Cardano provides a blockchain-based network for the development and execution of decentralized finance (DeFi) applications. The company's ADA token is used as the currency for transacting on the network, and it's possible that increased adoption of Cardano and services built on its blockchain will work to drive the price of its cryptocurrency significantly above current levels.  The ADA token has surged this year as Cardano has gained favor as a network for DeFi network services, and its roughly $53 billion market cap makes it the sixth-largest cryptocurrency. The token's gains have been incredible, but there have also been some big pricing swings along the way. ADA trades down roughly 46% from its lifetime high of $2.97 per token, but investors should keep in mind that regulatory risks and the potential for dramatic volatility in the crypto space mean it's still a high-risk investment. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

If you invested $10,000 in Nvidia stock the day ChatGPT came out, this is how much you'd have today

Buying Nvidia when the disruptive AI chatbot launched would have been a smart move.

Read more »

A Tesla car driving along a road at sunset
International Stock News

Why Tesla stock was climbing today

Investors were encouraged by news of a price hike on the Model Y.

Read more »

Plate with coloured wedges being parcelled out like a slice of pie representing a share split
International Stock News

Stock-split watch: Is Nvidia next?

Nvidia last split its stock when it traded for a pre-split $744 in 2021.

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

1 Wall Street analyst thinks Tesla stock is going to $125. Is it a sell?

Tesla is no longer a magnificent stock, according to a Wells Fargo analyst.

Read more »

A young man goes over his finances and investment portfolio at home.
International Stock News

Is Nvidia stock a buy?

The company's stock could rise 40% over the next two years and outperform the S&P 500.

Read more »

Man with hands in the middle of two items with money bags on them.
International Stock News

Is Nvidia headed for a stock split?

Nvidia stock has split five previous times in the company's history.

Read more »

Digital rocket on a laptop.
International Stock News

Nvidia shares surged (again) today. Is it too late to buy the red-hot artificial intelligence (AI) growth stock?

Nvidia stock has gained nearly 300% over the past year. Can investors still profit from this AI stock?

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Can you buy Nvidia shares on the ASX?

This stock has rocketed higher. How do we get access to it?

Read more »