Cardano (ADA-USD) hasn’t had a great 2022. Following the wild ride amid the coronavirus pandemic, many investors cashed out late last year, leading to severe volatility.
Once a glimmer of hope started to rise, the geopolitical flashpoint in Ukraine put such sentiments on hold. At that point, blockchain-derived digital assets found themselves in an awkward position.
On one hand, the extreme loss of value for the Russian ruble epitomized the case for decentralized money. Not only could they be accessed away from the clutches of sanctions, but cryptos also could hold their value in the face of hyperinflation-like destruction.
On the other hand, open warfare is not the most conducive backdrop for business endeavors. Although Cardano has demonstrated some upside vitality, the realities of armed conflict appear to have dominated its trading sentiment.
So it’s no small development that President Joe Biden issued an executive order that attempted to provide a framework for assets like Cardano.
Finally, the virtual currency sector has something substantive to nibble on.
A New Way Forward for Cardano?
After struggling for traction, cryptos recently bounced higher, with certain benchmark assets hitting pivotal psychological or technical thresholds. As anticipated, Biden presented a positive context for the digital market.
“The executive order, which attempts to fix the lack of a framework for the U.S. development of cryptocurrencies, has been broadly welcomed by the industry and its investors,” wrote CNBC’s Arjun Kharpal.
For example, Ripple Labs is under legal scrutiny by the Securities and Exchange Commission. Its XRP (XRP-USD) coin has been relatively strong despite the fact. It may be becase if XRP receives a favorable ruling, it would be the only crypto that enjoys legal guidance.
Imagine what such guidance could do for the entire crypto complex.
It’s this possibility that has many folks excited about Cardano again. After struggling over the past few months, ADA bulls can bank on something substantive rather than guess technical patterns on a chart.
To be sure, investors don’t want to get too crazy about Cardano. Nevertheless, the order provides one intriguing nugget. It directs the U.S. government to explore the “technological infrastructure and capacity needs for a potential” central bank-issued digital currency.
It’s speculation but ADA’s underlying fundamentals could be a factor.
Due Diligence Is a Must
Broadly speaking, crypto advocates scored a major victory with Biden’s executive order. While we’re still far away from establishing a clear and transparent framework, that one will be established seems to be a foregone conclusion.
For me, the loss of stability via the modern global order remains the biggest wildcard. Frameworks and guidance are awesome, but when the foundation of capitalist enterprises is under threat, other concerns simply take a backseat.
Take things a step at a time. The first goal for Cardano is to regain the $1 level and stay above it. Failure to do that makes the bullish case less credible.
On the date of publication, Josh Enomoto held a LONG position in ADA and XRP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
