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Cardano (ADA) Grows 20% In One Week, Will It Hit $1 Amid ‘Vasil’ Launch?

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Given the launch of the most anticipated hard fork of the Cardano blockchain dubbed Vasil, investors expect further growth in the crypto project in the near future. Consequently, the actions of traders to pre-launch the most significant update of the project increased the value of ADA more than the profits of other top-rated digital assets.

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The upcoming update will take place on June 29, 2022. And, perhaps, it will affect the adoption of the Cardano network more than its previous hard forks.

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According to the June 6 trading data, ADA has left the major cryptocurrencies behind as investors see potential in the latest update. Since it aims to empower the blockchain to execute smart contracts.

Yesterday’s example climb by 14%, reaching $0.64. On the other hand, its biggest competitor Ethereum was able to gain 6% at the same time.

Notably, Cardano, a proof-of-stack blockchain platform, has already experienced significant price increases many times over whenever hard forks have occurred in the past. An example of this is the Alonzo update launched in September 2021, which saw the price of ADA soar by over 200%.

Similarly, the Mary hard fork, launched in March 2021, showed a significant increase in the price of ADA up to 1600%.

ADUSD
The price of ADA is currently hovering around $0.60. | Source: ADA/USD price chart from tradingview.com

What trapped the ADA bulls?

Previous hard forks have taken place in an expansionary macro environment where price increases have generated huge profits. At the time, the Federal Reserve was buying $120 billion worth of government bonds every month.

But, unfortunately, given the continued higher inflation, the US central bank has now turned aggressive. As a result, analysts are now noting that there is less USD liquidity to buy highly volatile assets, including cryptocurrencies and equities.

Like the rest of the crypto market, Cardano has also lost momentum due to Fed tightening and high rates. As a result, ADA is nearly 80% below its $3.16 ATH registered in September 2021. These facts have significantly reduced the price of ADA.

Will the Vasil ADA upgrade raise the price of $1?

In order to guess the possible price movements during this event, we must first consider what the Cardano Improvement Proposals (CIP) include. Update adds four SIPs, including SIP-40 (Additional outputs), SIP-33 (Reference Scenarios), SIP-32 (Embedded date) and SIP-31 (Reference inputs). Basically, CIP-31 is expected to reduce transaction costs on the Cardano blockchain.

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Per statements of the Cardano development team in the first week of May: “Reference scripts reduce your transaction costs. Currently, new scenarios must be included in every transaction. With reference scripts, you can interact with the script through the reference by pushing it into the chain. Interaction with the smart contract becomes minimal.”

According to a survey conducted by leading crypto tracker Coinmarketcap, the price estimation tool shows that 24,468 people believe that the price of ADA could reach $1.06 at the end of this month. And 15,940 voters predicted $0.972 as the peak price of ADA at the end of July.

Featured image from Pixabay and chart from TradingView.com





Credit : www.newsbtc.com

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