Cardano is now on Robinhood. Should you be optimistic? – The Motley Fool Australia | Jewelry Dukan

Image source: Getty Images

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

Today used to be the popular online brokerage Robinhood Markets (NASDAQ: HOOD) announced that users can now buy and sell the popular cryptocurrency Cardano (CRYPTO:ADA) on his platform. Cardano is currently the 8th largest cryptocurrency in the world with a market cap of more than $15 billion as of this writing.

Like most of the crypto market, Cardano’s native token ADA has been under pressure this year with a price drop of around 67.5%. With the token now listed on Robinhood, is it time to be bullish?

Why listing Robinhood is a big deal

Joining Robinhood is a big deal for any cryptocurrency as 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 for its users to buy and sell through the platform.

The likely reason for this is that Robinhood is constantly under tight regulatory scrutiny as the first online broker to allow commission-free trading and has significantly expanded access to the markets for retail traders. Speaking on Robinhood’s recent conference call, CEO Vlad Tenev said that it wants to ensure that any cryptocurrency added to the platform is not classified as an unregistered security:

This can be dangerous and misleading for customers as they may expect these cryptos to be more decentralized than they really are. We apply a strict listing framework, which in the short term could give the impression that we are not moving fast enough. But we believe this approach will pay off in the long run.

The other great thing about Robinhood is that it opens up Cardano to a whole new user base and makes it very easy to buy and sell digital assets for Robinhood users who may be new to investing and intimidated by cryptocurrencies.

Not only does Robinhood have a very sleek digital interface, but it also has a huge user base. At the end of the second quarter of this year, Robinhood had nearly 23 million net cumulatively funded accounts and 14 million monthly active users.

Inclusion in Robinhood has not been an overwhelming catalyst for most cryptocurrencies. Previous cryptos added to the platform – like Bitcoin, ether, Litecoinand bitcoin cash — didn’t experience a big jump in price when they were inducted. On the other hand, the meme token Dogecoins up almost 39% after being added to the platform.

The news didn’t exactly help Cardano today as ADA’s price is actually down 1.7% in the last 24 hours. But we are still in the crypto winter and there is definitely broader access to popular cryptocurrencies now. Many brokerage firms are also lowering fees on certain crypto trades to stay ahead of the competition.

Should you be bullish on Cardano?

While today’s Robinhood news hasn’t proven to be a catalyst so far, I think you should be bullish on Cardano. It is definitely one of several cryptocurrencies that I believe have long-term potential.

Cardano’s network can currently handle 250 transactions per second, which is already pretty good, but developers are considering upgrades to the network that could eventually allow it to process up to 1 million transactions per second.

In addition, Cardano already works with a proof-of-stake mining concept, which is much more energy-efficient than the proof-of-work mining concept that Bitcoin works under and consumes tons of computing power. Cardano is also a popular landing spot for decentralized applications, and around 1,000 applications are being built on the network.

Ultimately, I think Cardano will rally along with Bitcoin once the crypto winter finally ends. While Robinhood isn’t a catalyst as of this writing, I think it could help spread awareness and attract more users to the cryptocurrency. The price of the token could certainly go down in the short-term, but in the long-term I think Cardano is a buy and so it’s a good time to be bullish on a much-dropped price.

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

Leave a Comment