This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Earlier today, the popular online brokerage Robinhood Markets (NASDAQ: HOOD) announced that users can now buy and sell the popular cryptocurrency Cardano (CRYPTO: ADA) on its platform. Cardano is currently the eighth-largest cryptocurrency in the world with a more than $15 billion market cap as of this writing.
Like most of the crypto market, Cardano's native token ADA has been hammered this year, with its price down roughly 67.5%. With the token now listed on Robinhood, is it time to be bullish?
Why the Robinhood listing is a big deal
Joining Robinhood is a big deal for any cryptocurrency because the platform is actually very picky about which cryptocurrencies are listed. With tens of thousands of cryptos now in circulation, Robinhood has only added 16 that can be purchased and sold by its users through the platform.
The likely reason is that Robinhood is constantly under a great deal of regulatory scrutiny as the first online brokerage that has enabled commission-free trading, which has greatly expanded access to markets for retail traders. On Robinhood's most recent earnings call, CEO Vlad Tenev said that it wants to ensure that each cryptocurrency added to the platform does not get classified as an unregistered security:
This can be dangerous and misleading for customers because they may expect these cryptos to be more decentralized than they really are. We employ a rigorous listing framework, which in the short term may feel like we aren't moving fast enough. But we think this approach will pay off in the long term.
The other big thing about Robinhood is that it opens Cardano up to a whole new user base and makes it very easy to buy and sell digital assets for Robinhood users who might be new to investing and intimidated by cryptocurrencies.
Robinhood not only has a very sleek digital user interface but also a massive user base. At the end of the second quarter of this year, Robinhood had almost 23 million net cumulative funded accounts and 14 million monthly active users.
Being added to Robinhood has not been an overwhelming catalyst for most cryptocurrencies. Past cryptos added to the platform -- like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash -- did not actually experience a huge price jump when they were included. On the other hand, the meme token Dogecoin jumped nearly 39% after being added to the platform.
The news hasn't exactly helped Cardano today, with the price of ADA actually down 1.7% over the last 24 hours. But we're still in the crypto winter, and there is definitely wider access to popular cryptocurrencies now. Many brokerages are also slashing fees on certain crypto trades to get ahead of the competition.
Should you be bullish on Cardano?
While the Robinhood news today has not proved to be a catalyst so far, I do think you should be bullish on Cardano. It's definitely one of several cryptocurrencies that I think has long-term potential.
Cardano's network can currently process 250 transactions per second, which is already pretty good, but developers are contemplating upgrades to the network that could eventually enable it to process as many as 1 million transactions per second.
Furthermore, Cardano is already operating under a proof-of-stake mining concept, which is much more energy efficient than the proof-of-work mining concept Bitcoin operates under, which uses tons of computing power. Cardano is also a popular landing spot for decentralized applications, and there are roughly 1,000 applications being created on the network.
Ultimately, I think Cardano will rebound along with Bitcoin once the crypto winter eventually ends. While Robinhood is not a catalyst as of this writing, I think it could help broaden exposure and bring more users to the cryptocurrency. The price of the token could certainly go lower in the near term, but in the long term, I think Cardano is a buy and therefore it is a good time to be bullish with the price way down.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
