A Seismic Price Shock: Cardano and Tron Gets Rocked After eToro Ban
The cryptocurrencies Cardano (ADA) and Tron (TRX) recently took a notable price plunge following a shocking announcement from the investment platform eToro.
Both ADA and TRX will now be “limited” on eToro, meaning US users will no longer be able to open new positions in either token or receive staking rewards.
Users in the US will be unable to open new ADA or TRX positions starting on December 26, 2021. Staking for both assets will end on December 31, 2021.
Staking is a ??process that allows users who own supported crypto assets to earn rewards simply for holding them.
“These changes are due to business-related considerations in the evolving regulatory environment,” eToro announced. “We are only limiting users from opening new positions. We are not forcing users to sell any existing positions.”
The Tron and Cardano blockchains use a Proof-of-Stake mechanism in which miners validate block transactions according to how many coins they have. More coins mean more mining power, which is a very different approach from Bitcoin, which cannot be staked due to its Proof of Work system.
Before the eToro announcement, ADA was worth $1.81, but then slumped to a low of $1.59 - a fall of roughly 12% - before leaping up. Tron’s fall was less precipitous. It dropped from $0.1 to a low of $0.966.
Users outside the US will still be able to stake ADA and TRX, whilst American eToro customers will soon be able to hold both tokens in their wallets. It also talked about an event coming at the beginning of 2022 which is likely to have an effect on the price of Cardano.
“For the time being all US users can sell their holdings and receive USD,” eToro continued. “However, in Q1 of 2022 we will limit the selling of holdings as well. This will not happen for at least 30 days after we offer support for redeeming your ADA and TRX coins to the eToro Money crypto wallet. We will notify you before this happens.”
In a video posted to YouTube, Cardano Founder Charles Hoskinson said the lack of a “global regulatory standard” was the problem and claimed non-American crypto firms were put off doing business in the US due to uncertainty over the rules.
He added: “The only way we’re going to solve this as an industry is through regulatory clarity. If you’re a European entity with principal European customers, you usually limit your U.S. exposure because the cost of U.S. exposure is extremely high.”
One person who seemed very sad about the great Cardano eToro exodus was Dan Gambardello, host of the popular YouTube channel Crypto Capital Venture - which is home to hundreds of videos about Cardano.
He wrote: “Let me get this straight. Cardano just got listed on a major crypto exchange (Bitstamp) that does $513B in volume a day, but all I am seeing is negative news about Cardano getting delisted from a small exchange (eToro) that only does $67B. Follow the data.”
Gambardello said he would buck the trend and avoid selling Cardano.
“Some people are talking about selling their ADA, and I am sitting here finally thinking about heavily accumulating for the first time in a long time,” he added.
Here is one piece of Cardano data to pay attention to. For 2021: Bitcoin is up 94%. Ethereum is up 476%. Cardano is up 827%.
“It's not that there is actually something wrong with $ADA. It's just that data and facts are mostly ignored when it comes to Cardano.”