Introduction:

Recently, Grayscale made headlines by removing Cardano (ADA) from its Digital Large Cap Fund. This move, part of its regular rebalancing, sparked discussions about the future of ADA in the crypto market. While Grayscale didn't provide reasons for the removal, it has raised concerns about ADA's performance and potential.

What Happened to ADA?

Grayscale's decision to drop ADA from its fund came as a surprise, especially since ADA was the only asset removed during the rebalancing. This action suggests that ADA may no longer fit the criteria for assets that perform well and add value to Grayscale's portfolio. ADA's price performance, with an 8.91% decline year-to-date, likely played a role in this decision.

Comparing ADA to MATIC:

This move by Grayscale draws parallels to its earlier removal of MATIC from the fund, which also faced challenges in returning to the top 10 cryptocurrencies. ADA's removal may indicate decreasing confidence in its potential, similar to what happened with MATIC after its exclusion.

On-Chain Data Analysis:

Despite Grayscale's decision, on-chain data for ADA shows promising signs. The increase in active addresses to 42,200 on April 5 suggests growing interest and usage of ADA. Additionally, evaluating ADA's daily on-chain transaction volume reveals mixed results, indicating both positive and negative impacts on holders' positions.

Conclusion:

While Grayscale's removal of ADA may impact sentiment around the token, it's not the end for ADA. Despite challenges, ADA's on-chain metrics indicate potential for resilience and even price appreciation in the future. However, the influence of "Wall Street," as mentioned by Cardano's founder Charles Hoskinson, remains a factor to consider in ADA's journey forward.