Cardano may be on the brink of a major DeFi transformation, with founder Charles Hoskinson proposing a $100 million sovereign wealth fund to supercharge the network’s ecosystem, an idea that could add weight to bullish long-term Cardano price forecasts.
The proposal would see 5% to 10% of the protocol’s treasury diversified into assets like Bitcoin and “yield-bearing instruments” like USDM—Cardano’s native stablecoin.
The stablecoin strategy centers around a self-reinforcing feedback loop: earn passive income by providing liquidity through staking, then use that income to buy back ADA and refill the treasury.
A Sovereign Wealth Fund Could Challenge Ethereum and Solana
Hoskinson estimates the strategy—if annualised—could grow the Cardano stablecoin treasury to $1 billion within 5-10 years, creating a more stable floor to encourage DeFi activity.
He noted that Ethereum and Solana are ahead in terms of stablecoin-to-TVL ratios, which enables them to lead in DeFi. With this strategy, Cardano could close the gap.
The inclusion of Bitcoin would serve as a hedge against the inflationary risks of fiat-pegged stablecoins, adding a defensive layer to the fund’s composition.
However, community governance stands in the way of its implementation, and not everyone is on board.
While Hoskinson maintains that the conversion is unlikely to negatively impact the ADA price, community members do not support 9-figure sell pressure in an already fragile market.
“If you hope to sell 140m at $0.7 next month, the market will ensure you sell it for $0.5,” commentator Cardano Whale added on X.
Cardano Price Analysis: Could the Fund Push a Breakout?
While the Cardano community governance process could delay implementation, a buy-the-rumor response from the market could fuel the breakout of the huge 7-month falling wedge pattern.
After several failed attempts breakout, the last rejection has set the Cardano price on the path to retest its lower boundary.
ADA / USDT 3-day chart, falling wedge pattern. Source: TradingView, Binance.It currently holds the 0.236 Fibonacci retracement level as interim support at $0.60—a level which typically coincides with local bottoms in a shallow retracement.
$0.60 has also acted as a significant demand zone since late 2024, but momentum indicators now cast doubt over its strength.
The RSI reversed sharply after being rejected at the neutral 50 mark. This reflects fading bullish strength, especially after bears failed to capitalize on recent seller exhaustion.
More so, the MACD confirms early signs of sustained downside, having widened its gap below the signal line after a death cross to start June.
If ADA loses the $0.60 level, it could delay a breakout, ruling out the current $1 technical target based on the 1.618 Fib extension—an 80% gain from current prices.
This bearish case could see the Cardano price fall 14% to the $0.50 support that marked the mid-April market bottom.
Looking further ahead, the July 15 Cardano ETF decision could be the next solid fundamental catalyst ADA needs to renew momentum, increasing demand in traditional investment markets.
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