Cardano (ADA) experienced a remarkable surge in early August, with its price increasing by over 70%. At one point, it even surpassed BNB to become the third-largest cryptocurrency by market capitalization. This rapid rise has drawn both excitement and skepticism from prominent figures in the crypto space.
Despite its market performance, Cardano has yet to launch its smart contract functionality—a fact that has led some industry leaders to question the reasons behind its growth. Among the skeptics is Mike Novogratz, CEO of Galaxy Digital, who publicly referred to ADA’s climb as “a mystery.”
A Series of Exchanges
The public dialogue between Mike Novogratz and Charles Hoskinson, founder of Cardano, began gaining attention in June.
ADA – An Unusual Cult?
In a June 13 interview highlighted by Yahoo Finance writer Zack Guzmán, Novogratz shared his thoughts on certain cryptocurrency projects:
“The market capitalization of some projects genuinely surprises me—Cardano, for instance. It baffles many top developers I know. Cardano has managed to build what I can only describe as a strange cult. These projects are akin to social tokens; inspired by Bitcoin, they create community-driven currencies that thrive on branding and social structure—not just code.”
In response, Hoskinson tweeted:
“Let me translate what this billionaire is saying: He’s upset that ADA isn’t like other venture-capital-backed tokens where insiders get favorable terms and manipulate markets. He doesn’t understand why a fair, transparent, and community-led cryptocurrency is labeled a ‘cult.’ I’ll remember that, Mike.”
Renewed Debate Over Market Ranking
When ADA briefly claimed the third spot in market capitalization rankings, it reignited criticism. Andrew Steinwold, partner at Polynexus Capital, tweeted:
“Why is Cardano the third-largest cryptocurrency? Is there something actually being used on the chain? Genuinely asking—I don’t know much about Cardano.”
Novogratz joined the conversation, adding:
“It’s a mystery to me. I’ve talked to 20 of the smartest people I know in crypto, and not a single one sees Cardano as appealing to developers.”
The Cardano Community Fires Back
Hoskinson was quick to respond with his characteristic wit:
“I talked to 20 of the top bankers I know in the industry, and not a single one finds cryptocurrency appealing at all.”
He went on to note that this type of critique was nothing new and promised to revisit the tweet annually.
Novogratz’s repeated critiques did not sit well with the Cardano community. Some users pointed out what they saw as hypocrisy, noting that Novogratz had previously framed the rise of Dogecoin as a form of protest against the traditional financial system.
One community member remarked:
“Novogratz calls Cardano a cult but earnestly promotes Dogecoin as a middle finger to the financial system. I’m sure his ‘smartest people’ are big Dogecoin fans too.”
A Step Back
After significant pushback from Cardano supporters, Novogratz softened his tone in a follow-up tweet:
“One thing I learned in the last 24 hours: Cardano has some passionate fans. I have no position in ADA, and I believe there are stronger projects out there like LUNA and SOL. Investors don’t need to chase every opportunity. I bear no ill will toward the ADA team.”
Understanding Cardano’s Value Proposition
Cardano is a blockchain platform built on a research-driven approach and peer-reviewed academic work. It aims to provide a more secure, scalable, and sustainable ecosystem for decentralized applications and smart contracts.
Although often criticized for its deliberate pace of development, Cardano supporters argue that its methodical process ensures greater reliability and long-term viability. The long-awaited launch of smart contracts is expected to be a major milestone.
👉 Explore real-time market analysis tools
Frequently Asked Questions
What is Cardano?
Cardano is a decentralized platform that aims to run financial applications, systems, and services through its native cryptocurrency, ADA. It is known for its strong emphasis on security, scalability, and sustainability, achieved through academic research and formal development methods.
Why is Cardano controversial?
Cardano draws criticism because it has not yet fully launched core functionalities like smart contracts, despite its high market valuation. Some analysts and investors question its utility and developer adoption compared to more established smart contract platforms.
How does Cardano differ from Ethereum?
While both support smart contracts and decentralized applications, Cardano uses a proof-of-stake consensus mechanism from the outset and focuses on formal verification and academic rigor. Ethereum is transitioning to proof-of-stake and currently has a larger ecosystem of active applications.
Is Cardano a good investment?
Like all cryptocurrencies, ADA carries investment risks. Its value is influenced by market sentiment, technological developments, and broader crypto trends. Before investing, consider your risk tolerance and perform thorough research.
When will Cardano launch smart contracts?
The rollout of smart contracts on Cardano is highly anticipated. The team has announced timelines in the past, but development in blockchain often faces delays. Always refer to official sources for the most accurate updates.
What is staking on Cardano?
Cardano allows ADA holders to participate in network security by staking their tokens. Stakers can earn rewards while helping to maintain the blockchain’s operations, all without locking funds or requiring specialized hardware.
Disclaimer: Cryptocurrency investments carry significant risk. Prices are highly volatile, and you may lose your entire investment. Always exercise caution and evaluate your risk tolerance carefully.