The cryptocurrency market has endured a significant downturn that wiped around $300 billion from its total market capitalization amid a wider sell-off in risk assets after the Federal Reserve cut interest rates by 25 basis points and signaled a more hawkish stance.
The Federal Reserve’s Chair, Jerome Powell, pointed to a potential easing of interest rate cutting in the next year, which impacted investor sentiment across risk assets and saw the price of bitcoin drop below $100,000, with the cryptocurrency now trading at $93,600.
Similarly, the price of Ethereum’s ether plunged from around $4,000 to now stand around the $3,400 mark after losing more than 16% of its value. Cardano’s native token ADA wasn’t unaffected and plunged around 3% over the last 24-hour period, from around $0.896 to $0.869 at the time of writing.
From a peak of around $1.316, the price of Cardano has dropped by around 20.6% over the past month, after the Federal Reserve cuts interest rates and revealed its hawkish stance.
ADA price chart via CCData.
The price of Cardano’s ADA is down over the past 24-hour period — as is the price of various other risk assets — as rising U.S. Treasury yields have strengthened the U.S. dollar, making risk assets less attractive.
Market uncertainty stemming from the Federal Reserve’s hawkish stance and the strengthening U.S. dollar have affected risk assets in general, with lower liquidity from the holiday period also having an influence on the market.
Cardano’s price drop has, according to available data, seen whales take advantage to accumulate more than 20 million ADA in just 48 hours, as first shared by popular cryptocurrency analyst Ali Martinez.
Whales have bought over 20 million #Cardano $ADA in the past 48 hours! pic.twitter.com/ofFBS3wec5
— Ali (@ali_charts) December 29, 2024
The accumulation comes shortly after the network’s Daedalus v7.0.0 upgrade of full-node desktop wallet software was released, making it easier for users to delegate their voting power to delegated representatives in the cryptocurrency’s ecosystem, while also allowing users to choose automatic voting options to have a voice in Cardano’s governance.
On top of these new features, the upgrade brings in a new voting tab allowing users to select their registration preferences for each wallet held in Daedalus, and is a new step ahead of the Cardano Constitution referendum scheduled for early next year.
On top of these developments, rumors have been circulating suggesting that the Cardano & XRP ecosystems may soon form a major partnership, with Cardano founder Charles Hoskinson having revealed he has engaged in discussions with Ripple’s CEO Brad Garlinghouse.
It’s currently unclear what such a collaboration can entail, although rumors suggest Cardano’s privacy-focused side chain Midnight could be involved, as could an integration of XRP with Cardano’s smart contract platform.
These talks are occurring at a time in which the New York Department of Financial Services (NYDFS) gave Ripple’s RLUSD stablecoin the green light to advance, and the token was launched on several cryptocurrency exchanges.
Featured image via Unsplash.
