Cardano (ADA) and the US National Crypto Reserve: Hype vs Reality

Cardano (ADA) and the US National Crypto Reserve

The idea of a U.S. national crypto reserve has sparked heated debate, with discussions initially covering a broad range of altcoins. However, skepticism has emerged over whether Cardano (ADA) truly belongs in the same league as Bitcoin (BTC) or Ethereum (ETH).

Despite its recent price surge, key metrics suggest that ADA still has a long way to go before meeting the stringent criteria required for a strategic reserve asset.

Cardano Under the Microscope

Venture fund manager David Nage recently scrutinized Cardano’s ecosystem, analyzing its total value locked (TVL), developer activity, and DeFi presence. His findings highlight ADA’s challenges:

• In Q4 2024, Cardano’s DeFi TVL stood at $448.9 million, a mere fraction of Ethereum’s massive $50 billion.
• Active addresses increased from 25,000 to 70,000, yet Cardano still only represents 0.4% of the total DeFi TVL across all blockchains.

While these figures indicate growth, they also underscore Cardano’s relatively small footprint in the broader DeFi landscape.

Crypto Heavyweights Express Doubts

Industry leaders remain unconvinced about Cardano’s suitability as a national reserve asset.

Cameron Winklevoss, co-founder of Gemini, firmly stated:

“Bitcoin is the only asset that meets the bar for a store of value reserve asset. Maybe Ethereum.”

Meanwhile, Coinbase CEO Brian Armstrong outlined two potential approaches:

1. A Bitcoin-only reserve, following the logic of BTC as “digital gold.”
2. A market cap-weighted index of multiple cryptocurrencies, which could include Cardano but would significantly favor larger assets like Bitcoin and Ethereum.

While the latter approach technically allows ADA’s inclusion, it also highlights its disadvantage compared to higher-market-cap assets.

ADA Price Surge vs. On-Chain Reality

Cardano’s recent 74.23% price increase between late February and early March 2025 has fueled speculation about its long-term viability. However, on-chain data presents a more sobering picture.

• Active addresses peaked at 320,000 during the 2021/2022 bull run but now hover below 100,000—suggesting a struggle to regain previous engagement levels.
• Santiment’s sentiment analysis reveals that much of the current ADA hype is fueled by political discussions rather than core blockchain advancements.
• Discussions around Cardano frequently include terms like “Trump,” “strategic,” and “reserve,” indicating that external narratives drive much of the excitement rather than actual adoption.

Skeptics argue that Cardano’s real-world usage remains limited, with some labeling it as “vaporware” due to a lack of high-impact applications.

Additionally, institutional confidence appears weak, with large-holder inflows and outflows dropping 97% in a week. Over the past 30 days, whales have reduced their ADA holdings by 1.68%, while mid-sized investors have increased their positions by 1.60%—suggesting a redistribution rather than fresh capital inflows.

Is Cardano Fit for a National Crypto Reserve?

Cardano’s potential inclusion in a national crypto reserve raises fundamental questions about what qualifies as a strategic reserve asset.

Analysts at Bernstein have expressed strong skepticism about expanding the reserve beyond Bitcoin, stating:

“Convincing Congress that Bitcoin is the new digital gold/global store of value might be achievable, but buying other blockchain assets from Fed or Treasury funds is a difficult sell.”

Further highlighting Cardano’s limited role in financial infrastructure, recent data shows:

• Cardano’s stablecoin representation stands at $22.3M out of a $223B total—a mere 0.01% of the global stablecoin market cap.
• This minuscule footprint in a critical financial segment makes it difficult to justify ADA’s inclusion in a national reserve.

Bridging the Gap: What Cardano Needs to Do

For Cardano to align its political recognition with real-world adoption, key metrics must improve significantly:

• Active addresses need to return to 320,000+ daily users to indicate strong engagement.
• Total Value Locked (TVL) must expand beyond its current 0.4% share to demonstrate meaningful capital deployment.
• Stablecoin infrastructure must scale beyond its current 0.01% of global stablecoin market capitalization to gain legitimacy in financial markets.

As David Nage pointed out, for ADA to be seriously considered for a national reserve, Cardano must:

1. Develop widely used products that attract millions of users.
2. Secure stronger institutional backing to reinforce its credibility.
3. Establish a clear, compelling narrative that positions ADA as an indispensable financial asset.

Final Thoughts

While Cardano’s community remains passionate, current on-chain metrics do not yet support its status as a national reserve asset. There is a clear gap between political discourse and actual market fundamentals—a gap that can only be bridged through sustained ecosystem development, broader adoption, and deeper integration into global finance.

For now, Cardano’s future in a U.S. national crypto reserve remains an open question rather than a certainty.