U.S. President Donald Trump’s decision to include Cardano’s native cryptocurrency ADA in his planned “strategic crypto reserve” sent shockwaves through the blockchain community, and it made massive gains.
ADA’s value jumped more than 70% in under 24 hours as investors scrambled to fill up their bags of the newly crowned national crypto asset, while its overall trading volume exploded, rising 1,807% during the same timeframe.
Trump’s plan to create a crypto reserve is intended to achieve his stated goal of elevating “this critical industry” in the U.S. He said that by creating a national stockpile comprised of BTC, ETH, XRP, SOL and ADA, he will “make sure the U.S. is the Crypto Capital of the World.”
It’s a move that signals a dramatic reversal of the U.S. government’s stance on crypto, following years of intense regulatory scrutiny during the administration of Trump’s predecessor Joe Biden. Now, the U.S. intends to integrate leading digital assets within the country’s financial infrastructure, in a move that could see crypto become an integral part of the country’s economy.
Why Cardano?
The inclusion of Bitcoin, the world’s oldest and most valuable cryptocurrency, and Ethereum, the most popular smart contract blockchain, didn’t surprise anyone. Solana’s inclusion, as the closest competitor to Ethereum, is also understandable, while XRP’s traction with some of the world’s biggest banks, who use it as a vehicle for fast, low-cost cross-border payments, justifies its inclusion. But what about Cardano? Why is it also on the list?
Fast and Energy Efficient
Although Cardano is perhaps less well known compared to the other four in the reserve, there are some compelling reasons why it makes sense to stockpile ADA.
Known for its peer-reviewed approach to blockchain research, Cardano is building a highly scalable and sustainable blockchain platform that’s able to support real-world applications in industries such as finance, identity management, governance and Central Bank Digital Coins or CBDCs.
What’s interesting about Cardano is its novel architecture. Its blockchain relies on a unique, two-layer architecture that’s powered by an alternative proof-of-stake consensus mechanism to support rapid, low-cost transactions. Moreover, it integrates an Extended UTxO model that delivers incredible energy efficiency gains compared to proof-of-work blockchains such as Ethereum.
Cardano’s founder Charles Hoskinson told Forbes in a 2021 interview that the network is a staggering 1.6 million-times more energy efficient than Bitcoin.
Another key advantage of Cardano is its peer-reviewed approach to research. Unlike other projects, its developers and engineers work closely with academics to generate in-depth research that guides its future development. This, coupled with the fact it’s entirely open-source, should ensure Cardano evolves and outlives its parent organization.
Moreover, Cardano’s decentralized constitution lays the foundation for a distributed governance model that ensures responsible and open decision-making. With the recent Plomin hard fork, ADA holders can actively engage in protocol governance.
Interoperability & Compliance
In addition to the above benefits, Cardano’s novel architecture positions it to solve the blockchain industry’s pressing interoperability challenges, and the problems around liquidity fragmentation that derive from these.
Cardano itself is a multi-asset chain that’s able to support various digital assets, including those that live on other blockchains. It’s also home to interoperability-focused projects such as Apex Fusion, which plays a crucial role in bridging Cardano with the world’s largest blockchain ecosystem, Ethereum. Co-founded by Cardano and Ethereum veterans, Apex Fusion’s network integrates with both the UTxO model and Ethereum’s EVM, ensuring seamless cross-asset transfers via its Reactor Bridge. Through this innovation, it can help Cardano to play a vital role in facilitating the flow of liquidity across crypto ecosystems.
Apex Fusion also aids Cardano in its quest to become the most compliant blockchain around. With Trump’s strategic crypto reserve likely to encourage more traditional financial institutions to explore digital assets, blockchain is going to need compliance-friendly integrations with fiat. Apex Fusion’s FINMA status makes its cross-chain interoperability mechanisms legally compliant by design, ensuring that Cardano itself is more appealing from a regulatory perspective.
America First
One more reason for Cardano’s inclusion on the list might be politics. Trump has made no bones about his “America First” approach to supporting the crypto industry, as with every other. When he announced the reserve, he framed it as a move that aims to boost the U.S. crypto industry, and so it makes sense that American projects should get preferential treatment.
Trump said as much when he appeared at a Bitcoin conference last year during his election campaign, where he declared that “if crypto is going to define the future, I want it to be mined, minted and made in the USA.”
If that’s the case, then Cardano fits the bill as one of the most prominent homegrown U.S. crypto projects, founded as it was by an American citizen in Hoskinson. The thinking is that by promoting U.S.-based crypto projects, the government will encourage local investment in these companies and create more jobs for American blockchain developers and engineers.
Trump’s Decision Is Clear
Platforms like X, Reddit, Discord and Telegram continue to buzz with debate around whether or not Cardano’s deserves its place in a U.S. strategic crypto reserve. But regardless of its merits or faults, Trump himself has decided that Cardano and ADA deserve to make the cut, and as with most things regarding his administration, his word is usually final.
It’s a surprising move for some, but believers in Cardano and its ecosystem will be rubbing their hands with glee at the prospect, which will almost certainly inject fresh momentum into what is already one of the most established and promising crypto projects around.
