With analysts suggesting that Cardano could launch a stablecoin capable of rivaling USDC, a leading entity has predicted how this move could impact the price of ADA.
Circle and Tether have long dominated the stablecoin market. While Tether’s USDT is at $181.42 billion, Circle’s USDC stablecoin has a market cap of $76 billion.
Cardano Founder Says Circle and Tether Will Soon Lose Stablecoin Dominance
In a recent X post, Cardano founder Charles Hoskinson suggested that Tether and Circle could soon lose their dominance in the market. This follows reports that several financial institutions, including Barclays and Citibank, are collaborating on a unified stablecoin initiative.
In his view, this move could create a more open and competitive stablecoin market, rather than one dominated by Circle and Tether.
Meanwhile, the team behind Cardano has been pushing to have a tier-1 stablecoin within the ecosystem. This commitment prompted the development arm of Cardano, Input Output Global (IOG), to launch the Djed stablecoin (DJED) in January 2023.
Despite maintaining a stable value between $0.97 and $1.03 for 99% of the time since its launch, DJED has yet to gain widespread adoption. Currently, the token only boasts a market cap of around $3.2 million, which is significantly lower than USDC’s $76 billion valuation.
Last week, Hoskinson referred to DJED as a “fun experiment,” with analysts suggesting that the team could make another attempt to create another stablecoin that could rival existing ones.
In light of this, The Crypto Basic examined how much one ADA token could be worth if the Cardano team were to launch a stablecoin capable of rivaling USDC.
Price of ADA If Cardano Launches a Stablecoin Rival to USDC
As of press time, USDC ranks as the second-biggest stablecoin globally, boasting a valuation of $76 billion. USDC’s valuation surpasses the entire stablecoin market cap on Cardano, which currently stands at $36.9 million.
To rival USDC, Cardano would need to develop a stablecoin that achieves significant market adoption and demonstrates the same level of stability and trust.
To compete for the second spot in the stablecoin market, a potential Cardano stablecoin would need a market cap in the tens of billions, possibly even matching USDC’s valuation.
However, developing a USDC competitor within the Cardano ecosystem would not directly affect ADA’s price, as ADA’s value is primarily determined by its market capitalization and circulating supply. Essentially, a rise in market cap would lead to a corresponding price increase, and vice versa.
Yet, the successful launch of a stablecoin capable of competing with USDC could stimulate DeFi growth and overall network activity, which may indirectly strengthen ADA’s value over time.
Citing forecasts from crypto analysts, Google’s AI model Gemini predicts that ADA’s price could rise to between $1.25 and $3 by 2027 if Cardano successfully launches a stablecoin that rivals USDC. The chatbot further projects that ADA could reach $10 by 2030 under favorable market conditions.
As of press time, ADA was changing hands at $0.69, representing a 24-hour decline of 3.93%. This indicates that ADA demands a rally of 1,349% to reach the $10 target.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.