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With Bitcoin prices rallying and perhaps suggesting an end to an almost three-month-long bearish market, it finally appears that the crypto market is back with a bang. And it’s not just Bitcoin that has been displaying a stellar performance. While Ethereum’s price has nearly doubled during the same time period, ADA, the native token of Cardano, shot up by as much as 20% early Wednesday, 11 August.
After breaking at $2 earlier today, Cardano surpassed Tether to become the fourth-largest cryptocurrency by market cap, trailing only Bitcoin, Ethereum, and Binance Coin. With a market capitalization of over $60 billion, ADA is now trading above $2 for the first time since May 2021.
Over the last four days, Cardano’s trading volume has increased by more than 250%, indicating that the increase is primarily linked to the Alonzo hard fork. According to Investopedia, a hard fork is “a radical change to a network’s protocol that makes previously invalid blocks and transactions valid, or vice-versa.” It is usually developers or members of the crypto community who initiate fork implementations on an existing blockchain when they are dissatisfied with the features they provide.
Alonzo hard fork and the subsequent price rally of Cardano
Cardano’s series of Alonzo updates have been considered one of the most exciting developments so far. Now Input Output Hong Kong – the team behind ADA – has unveiled the public testnet for the upcoming smart contract integration, revealing the imminent Alonzo Purple upgrade.
As this marks the first public testnet for smart contracts on Cardano’s high-speed ecosystem, investors and enthusiasts are all abuzz over the announcement, which came out like a thread of tweets on the Input-Output Hong Kong (IOHK) Twitter account. Many cryptocurrency enthusiasts around the world have become bullish on the token’s price action in the future following the announcement.
Additionally, this is the first time ADA is hosting graduates and developers on a public testnet before the hard fork occurs. Several exchanges are also expected to participate on the testnet before the hard fork combinator event. Once this team has been formed, the testnet will become fully public.
With the Alonzo upgrade, there is no doubt that Cardano’s network will integrate more advanced smart contracts and decentralized financial applications into its blockchain.
According to the ADA team’s color-coded roadmap, the blue and white upgrades have already been completed on Alonzo.
- Alonzo Purple represents the penultimate step in this series of updates, and it may help Cardano catch up to Ethereum’s adoption of smart contracts.
- The final element of the roadmap is Alonzo red and black, which includes network scalability and network governance.
Once all the upgrades are implemented successfully, the last step in the roadmap will be the Mainnet release. A hard fork combination event will change the Cardano Mainnet from what is currently known as the Mary era to the new Alonzo era. From that day forward, real smart contracts and dApps that interact with real ADA will be made possible.
Following the announcement of the testnet launch, Konstantin Anissimov, executive director at London-based crypto exchange CEX.IO, said, “With Friday’s revelation that the mainnet launch is on track, crypto investors and enthusiasts in general, were hyped on the optimism that a supposedly superior blockchain infrastructure with the possibility to support the next generation of smart contracts is on the horizon.”
As a result of recent developments, traders surely have an optimistic outlook on Cardano, with the altcoin’s price jumping by roughly 21.8 percent in the last two weeks and the potential to climb to a whopping $5. Given that the altcoin had failed to close above $1.39 in five of the last six months, the recent breakout of $2 is undoubtedly a key price level that will influence ADA’s future price movement.
Given the enormous increase in ADA activity over the last year, with over 650,000 staking addresses as of last month, several analysts and experts see Cardano as a token with significant future potential. Investors should be aware, however, that the Alonzo hard fork is not likely until early October. As a result, an unanticipated delay in the protocol change could cause market participants to sell, undoing all of the current optimism.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.