A significant development from a major cryptocurrency exchange is providing tangible utility for Cardano (ADA) investors. Coinbase has now integrated ADA as an acceptable collateral asset within its decentralized lending service. This move allows token holders to access liquidity without the need to sell their holdings, potentially influencing ADA’s practical adoption and market dynamics.
Lending Expansion and Tax Implications
Coinbase has broadened its on-chain lending offerings. Previously supporting assets like XRP, Dogecoin, and Litecoin, the platform now includes Cardano’s ADA as eligible collateral. Eligible U.S. customers, excluding residents of New York state, can borrow up to $100,000 in USDC by pledging their ADA holdings.
This service operates technically through a partnership with the DeFi protocol Morpho. A key benefit for users is the ability to leverage their cryptocurrency assets for loans. This approach can allow investors to avoid creating a taxable event, which would typically occur if they sold their crypto holdings outright.
Institutional Adoption and Whale Activity
This lending feature arrives shortly after another institutional milestone for Cardano. On February 9, the CME Group launched ADA futures contracts. The exchange reported that the inaugural ADA futures trade was executed between Cumberland DRW and Wintermute.
Concurrently, on-chain analytics from Santiment reveal notable accumulation patterns among large addresses. Wallets holding between 1 million and 100 million ADA collectively acquired approximately 240 million ADA over the past week. Market observers often interpret such accumulation by large holders, or “whales,” as a signal of increased confidence in the asset’s medium-term prospects.
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Ecosystem Development and Technical Roadmap
Several parallel developments are converging within the Cardano ecosystem. According to the latest Cardano Community Digest, Intersect MBO, acting on behalf of the Pentad, has approved the integration of LayerZero. This omnichain messaging protocol is designed to connect Cardano with over 150 other blockchains, significantly enhancing the cross-chain capabilities of applications built on the network.
On the core technology front, Cardano Node v10.5.4 has been released. This update introduces network-level improvements aimed at increasing node resilience. It also includes preparatory work for an upcoming hard fork and the proposed naming of protocol version 11 (“van Rossem”).
The Cardano newsletter provides specific timelines for upcoming launches. The Midnight mainnet, a privacy-focused partner chain, is scheduled to launch by the end of March. Furthermore, USDCx, a privacy-enhanced variant of Circle’s USDC stablecoin, is expected to arrive on Cardano before the end of this month.
Regarding market performance, ADA is currently trading in a range between $0.27 and $0.28, according to CoinGape data, with a market capitalization of approximately $10.5 billion. The token has posted a weekly gain of around 4%, while the $0.30 price level is currently viewed as a key resistance zone.
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