Cardano's Price Drops 1.008% Amid Ecosystem Challenges

Cardano's latest price was $0.5723, down 1.008% in the last 24 hours. The cryptocurrency has been facing several challenges within its ecosystem. The total value locked in its decentralized finance ecosystem has dropped nearly 20% over the past 30 days to $315 million. This decline is part of a broader trend of ecosystem challenges that Cardano is currently experiencing. Additionally, the network has seen a significant slowdown, with daily active users dropping to just 20,000, the lowest level since 2020 and well below the year-to-date high of 38,000. Transaction activity has also declined sharply, with Cardano processing 797,000 transactions in June, down from 2.8 million in December 2023.

Despite these challenges, there are signs of optimism within the Cardano community. Whales have begun accumulating ADA, suggesting growing expectations for a recovery. Santiment data shows that wallets holding between 1 million and 10 million ADA now hold 5.51 billion tokens, up from this month’s low of 5.45 billion. Similarly, holders with between 100 million and 1 billion tokens now control 3.25 billion ADA, up from 3.02 billion in May. Addresses with between 10 million and 100 million tokens hold 13.1 billion ADA. A possible reason for the ongoing ADA accumulation is the upcoming Midnight airdrop.

Cardano founder and Ethereum co-founder Charles Hoskinson has proposed the creation of a sovereign wealth fund backed by the ADA treasury to boost the blockchain’s presence in decentralized finance (DeFi). According to Hoskinson, between 5 and 10% of the on-chain treasury worth about 1.2 billion dollars should be exchanged into harder assets like Bitcoin or stablecoins. The proposal aims to reinforce the financial basis of Cardano and introduce stability in the DeFi ecosystem. Hoskinson made a comparison to the Government Pension Fund Global (GPFG) of Norway, a government-owned fund that doubled in value to nearly 2 trillion in 2019 to 2024. Whereas the fund in Norway was founded on the oil revenues, today the fund earns majorly in global equities and government bonds. Hoskinson sees a similar path ahead of Cardano, where the rewards generated on Bitcoin and stablecoin will be used to buy back ADA and thus push its price upwards.

The arguments of Charles Hoskinson are based on the two main aspects: the ongoing and further fiscal expansion in the U.S. and the emergence of stablecoins as sovereign digital financial resources. The U.S. government is yet to avoid cases of overspending; therefore, there is a risk of the dollar being devalued. With its decoupled supply and centralized agreement, Bitcoin will continue to be a hedge-asset, more so as institutional access has become easier with spot ETFs. Stablecoins such as USDC and USDT are heavily exposed to U.S. Treasuries. The current tether alone holds approximately $120 billion in Treasuries and makes over 1 billion dollars in Q1. The Reserve Fund of Circle also is weighted intensively in the U.S. Treasury securities and repurchase agreements. Such stablecoins end up strengthening the U.S. debt markets even as it drives the digital dollar supremacy. Entering stablecoin markets at the right time would make Cardano the first major blockchain asset to take advantage of regulatory certainty, given that a U.S. central bank digital currency (CBDC) is no longer on the cards due to a backlash under the Trump administration.

In the long perspective, Charles Hoskinson could convert Bitcoin and stablecoin profits into purchasing ADA back in the same manner as the corporate stock buyback practice that usually causes supplies to decrease and the prices to stabilize. Although Cardano finished with its smart contract phase in 2021, its performance remains poor; averaging only 0.26 TPS and 2 minutes finality compared to the 12.8-second finality and high transaction throughput offered by Solana. ChainSpect ranks Cardano at the 34th position in terms of real-time TPS with a paltry 267.5 million in DeFi total value locked (TVL) as compared to Solana with 8.3 billion and Ethereum with 62.7 billion. The amount of the stablecoins on Cardano is only $ 31,44 million in contrast to the liquidity on Ethereum or Solana. The DeFi of Cardano is furthered by the lack of liquidity resulting in slippage and losses. Confidence, diminishing volatility, and enhanced lending may be increased through the provision of stablecoin liquidity. According to Charles Hoskinson, a liquidity infusion of roughly 100 million in stablecoins can do wonders in enhancing Cardano dApp activity. DexHunter is the most popular platform in the Cardano ecosystem by the number of users, whereas Lenfi boasts the largest TVL, which is just $11.62 million falling significantly short of the DeFi activity on the main chains. The altcoin markets are highly speculative and diluted, stablecoins are a much hoped-for stability and sustainable income. The underlying application of stablecoin loans exhibits maturity in Ethereum. Cardano needs to venture into risky treasury policies to be competitive. Cardano would potentially become a more versatile financial platform that is sustainable and geared towards growth upon adopting the proposal by Charles Hoskinson to diversify into Bitcoin and other stablecoins within the crypto economy that is currently changing.

As Charles Hoskinson suggested, diversification into Bitcoin and stablecoins of the Cardano treasury can be a strategic shift to rejuvenate its DeFi environment. In a regulatory environment, where stablecoin dominance is on the rise and institutions are becoming less risk-averse, launching an extension like this could make Cardano a more stable and growing blockchain as the crypto industry becomes more competitive.

Charles Hoskinson, the founder of Cardano, recently highlighted the significance of a newly affiliated explorer linked to the Midnight sidechain project. In statements made public on June 30, 2025, Hoskinson emphatically endorsed this development, characterizing the Midnight explorer as fundamental to enabling cooperative economics within the ecosystem. This endorsement signals ongoing efforts to enhance Cardano's infrastructure, particularly focusing on privacy-centric solutions designed to support new decentralized economic models.

Concurrently, strategic movements are underway aiming to position Cardano prominently within the Bitcoin decentralized finance landscape. Central to this initiative is the Cardinal Protocol, intended to significantly transform Cardano's approach to decentralized financial applications and integrate it more deeply as a functional layer within the Bitcoin ecosystem. Hoskinson has emphasized the necessity for dedicated executive leadership to guide this complex transition successfully, underscoring the importance of a cohesive strategy and clear narrative to advance Cardano's role within the expanding Bitcoin DeFi sector.

These technical and strategic developments coincide with broader reflections on Cardano's potential trajectory for the remainder of 2025. Observers note that outcomes and project milestones expected later this year could substantially influence the platform's ecosystem growth and adoption trajectory. Focus remains squarely on the execution of these foundational initiatives – the advancement of the Midnight ecosystem and the Cardinal Protocol's integration plans – as critical factors shaping Cardano's future utility and position in the blockchain space.