Sirwin
Sirwin
Cardano (ADA)

Delisting of Cardano (ADA) from eToro: Should you be concerned?

By Askme | Fibonacci Music | 9 Dec 2021


The simple answer is No, not really. There I saved some time. I did not want this to be a click-bait title but me saying, "I am telling you bro, trust me" doesn’t cut it for everyone and well, it shouldn’t.

As compared to other big names in the crypto space, Cardano has been a slow turd that has a graph more akin to the trajectory of stable value companies in stock market more than a crypto coin. It is the white elephant sauntering unhurried in a desert with lions, cheetahs, and deer rushing by. To give it some credit though it made its initial bull-run around the end of 2020, leading up to March 2021 where it climbed to around $1.30

 

Why the Big Deal
Cardano FUD:

Its listing on Coinbase did not make the splash as expected and after climbing up to a high of $3.10 around September (with almost all other coins), it has come back to its slumber party mode and is currently back to $1.30. In comparison, Solana which has recently overtaken Cardano in market cap had a run from around $2 to $180. For someone who invested in March this year, it has been an adventure-less, sad, gain-free, frustrating year with Cardano. When such things happen, the FUD sets in, and peoples start wondering, am I missing something? Is this the really right investment for me? And you can’t help but start speculating on the reasons. That’s when the news of eToro delisting Cardano hit the market.


The eToro Statement:

eToro website announced on 23rd November 2021 that described their delisting of Cardano(ADA) and Tron(TRX) from their exchange. The sentence that caused the stir was

These changes are due to business-related considerations in the evolving regulatory environment.

‘Business related’ and ‘Regulatory environment’ are both rabbit holes that no one can completely understand, and it was bound to cause some problems for Cardano. As mentioned, Tron got delisted too, but Tron is not as big a name as Cardano.


eToro Market Impact:

eToro is a big enough name in the exchange space primarily owing to its stock market platform with which it started. Similar to many exchanges, they offer a few crypto coins. Starting in 2007, it has gained a good reputation both in safety and services. A big name delisting another big name becomes big news.

 

General Market conditions:

Soon as the listing was announced, as is typical in the crypto market these days, fear set in and the number of sellers increased. The price of Cardano dropped as much as 5% in a very short time. This is typical of a market-driven by sentiment and fear.


Reasons behind the Delisting:
Staking pools:

Cardano and Tron, the two delisted coins are the only ones that were available for staking on eToro. While several provisions for mitigating the effect have been put in place, there are a few problems that make delisting a big deal. For example, there is still no option to transfer the currencies to the associated eToro wallet which they intend to add in the first quarter of 2022.

 

US Regulations:

US regulations and cryptocurrencies have had their daggers drawn for a long time. Efforts are being made both by the Govt. and the currencies involved to avoid further regulatory issues. However, since the rules are unclear, it sets an atmosphere of uncertainty which makes it difficult for the crypto market to determine their future course of action. The US is not the only place where currencies are traded, but it is one of the largest, or possibly the largest markets for it.

 

eToro Limitations:

Another word in the rumor mill goes like, the problem might be with the bookkeeping of eToro. They were not able to maintain their books as well when it comes to staking pools viz. Cardano and Tron. The exchanges have to maintain a certain amount of liquidity when it comes to staking pools and since originally eToro is a company based out of Europe, precisely in Israel, it is difficult to do so in addition to the regulatory uncertainties and risks. The trading of Cardano remains the same on its EU exchange and worldwide.

According to current stats of Coinmarketcap, eToro is #67 in terms of Cardano holdings amounting to less than 0.5% of the total circulating supply at the time of the announcement. Some other things that are going well for Cardano are:

  • The news of delisting was for a specific exchange, in a specific country, for a specific coin and has had no amplified impact since then. Given the specificity, it is little safe to assume that it was a singled-out case.
  • The number of wallet holders of Cardano has been consistently increasing over the last year.
  • The number of projects working on or with the Cardano ecosystem has also been consistently on the rise.

 

Charles Hoskinson, the founder of Cardano and co-founder of Ethereum lashed out at the Government in a viral video. He spoke about the need for better regulations and clarity in the crypto space. In another statement, he also said that the listing was unfortunate, and he had no prior information or intimation in that regard.

While one is free to make their judgment about the future of Cardano, the delisting on eToro IMO should not be factored in very strongly. Cardano investors have had a very patient testing period and some of it is well displayed funnily by Alex Becker on his YouTube channel by making it a point to dedicate a minute of his video for Cardano. If history is any proof, XRP had a similar fallout with SEC in the US and saw its price drop massively in a short time from 60 cents to 17 cents. But today it has gone up again multiple times from that price. One can stay in or out of investing in this coin, but panic selling has never been a good idea. For the long-term patient holders of Cardano, hopefully the white elephant makes the move soon.  

Note: This is a personal opinion, not a financial advice. Always do your own due diligence. 

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Askme
Askme

Tech-savvy crypto enthusiast.


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