Summary Cardano's price surged after President Trump announced plans for a strategic crypto reserve, but its on-chain activity remains low compared to other top blockchains. Cardano's daily active addresses and transaction volumes have significantly declined, indicating low network usage despite its high market capitalization. Cardano's DeFi activity shows a growing trend, but its Total Value Locked remains underwhelming, and its stablecoin footprint is limited without Tether or USD Coin. Without concrete plans from the administration, ADA's price spikes are likely hype-based, presenting opportunities to reduce holdings due to the chain's low activity. When I last covered the Cardano ( ADA-USD ) blockchain in February 2024, I labeled it a "network that needs a catalyst." Well, a little over a year later, we may have that catalyst. A lot can change in a year. And for cryptocurrencies like ADA, even a single day can bring about an enormous move in the valuation of an asset. In a March 2nd Truth Social post , US President Donald Trump announced plans for a strategic crypto reserve. To the chagrin of some within the digital asset community, ADA was one of the tokens mentioned for inclusion in such a reserve. Performance since 2/14/24 (Seeking Alpha) The price quickly re-rated substantially higher, from 65 cents to well over $1 per coin. In fact, ADA was actually about flat from my February 2024 article the day prior to Trump's Truth Social post announcing the strategic reserve. While it had admittedly out-performed Ethereum ( ETH-USD ) over that time frame – an asset that I've been long – I believe that discrepancy has been more indicative of fundamental issues with Ethereum rather than a strong bullish case for Cardano. In this article, we'll again dive into on-chain activity for Cardano and look at what, if any, stablecoin footprint the network has since that is a segment of the industry that is becoming increasingly more important. Cardano Network Usage Data I would encourage everyone to keep in mind that when I share this usage data, my intention is not to get into 'what ifs,' hopes, dreams, or technical capabilities. I'm merely sharing what is actually happening. And like it or not, Cardano is a blockchain that has rightfully (in my eyes) earned a reputation as being a network that is valued purely on future expectations rather than observable utility. Again, we're talking about actual usage here, not capabilities. The reality is, there is very little activity happening on this blockchain compared to every other chain with a top-ten market capitalization – with the exception of XRPL ( XRP-USD ). Cardano Monthly DAA Trend (Artemis) For the month of February, Cardano's Daily Active Address (or DAA) average was 29.4k addresses per day. The network averaged 46.6k DAAa during February 2024 and 37.7k in January. While there was a noticeable pop in DAAs during November and December last year, the reality is Cardano's daily active address averages haven't sniffed the six-figure highs of 2021 and early 2022. Cardano Monthly Transactions (Artemis) It's a very similar trend for Cardano in transactions. At 1.3 million total transactions in the month of February, network transactions were down 32% from January and 35% year over year. Compared to other chains, these are very low levels of activity given ADA's current valuation: Network (24hrs) DAAs Transactions TVL Market capitalization Bitcoin ( BTC-USD ) 603,520 386,183 $5.4b $1.7 trillion Ethereum 412,504 1,342,176 $48.5b $269.5 billion BSC ( BNB-USD ) 1,137,049 4,654,780 $4.9b $85.7 billion Solana ( SOL-USD ) 4,707,304 54,429,320 $6.9b $73.8 billion Cardano 32,381 50,094 $268m $22.8 billion Tron ( TRX-USD ) 2,762,108 8,936,051 $4.7b $20 billion Source: Artemis Where these other chains with multi-billion market valuations have DAAs in the hundreds of thousands or millions, Cardano's are measured in the tens of thousands. The same is true of transactions. Even Total Value Locked, or 'TVL' for Cardano is hugely underwhelming at $268 million. For a smart contract blockchain with a top 10 market capitalization, one would expect this figure to be higher. DeFi and Stablecoin Supply Though I'd personally call it underwhelming from a nominal standpoint at $427 million, Cardano's DeFi activity is generally growing based on TVL data going back to 2022: Cardano TVL and Stable Supply (DeFi Llama) On the surface, the network appears to be enduring 'boom and bust' type cycles where TVL increases sharply before coming back down to trend. Importantly, the multi-year trend is indeed higher. But keep in mind, this is the trend measured in dollars. Measured in ADA, Cardano TVL actually peaked in December 2023 and then 'double topped' in November 2024: Cardano TVL in ADA (DeFi Llama) Since then, the trend has generally been down and at levels not seen since summer 2023. One bright spot has been the growth in stablecoins. Not just in an aggregate figure sense, but also in choice of assets: Cardano Stablecoin Dominance (DeFi Llama) Prior to last summer, there were essentially just two stablecoin tokens on Cardano. That figure is now four different tokens, with top coin dominance coming in at just 35.8% share of the market. Notably, neither Tether ( USDT-USD ) nor USD Coin ( USDC-USD ) have been issued on Cardano. There are some within the community who view this as a missed opportunity for Cardano while others prefer the network remain home to tokens that are more aligned with Cardano's success rather than the chain-agnostic leaders in the stablecoin space. Closing Takeaways My personal view is that 'altcoin' inclusion in any US 'strategic crypto reserve' is acceptable, provided those tokens can be used to facilitate cross-border stablecoin settlement. Otherwise, I don't see a real purpose for the US government holding numerous digital assets in reserve. To be sure, there is a case to be made for an asset like Bitcoin due to what I'd call market 'acceptance' that it is here to stay as an anti-fiat asset. But for smart contract chains that are used for DeFi and settlement of tokenized USD, I'd assume the United States would want to support networks that are home to dollar assets with T-bill backing. Without Tether and Circle issuing the market-leading stables on Cardano, it's difficult for me to see ADA really being necessary for a strategic reserve. Of course, time will tell on all of this, and the submission of this article pre-dates Trump's 'crypto summit' on March 7th. But without concrete plans from the administration on allocation and timeline, I think hype-based pops in the price of ADA are probably opportunities to lighten up given the lack of users and activity relative to peers.
