Grayscale increased its Cardano (CRYPTO: ADA) allocation in its Smart Contract Fund as the blockchain pushes into Bitcoin DeFi, aiming to bring external Bitcoin (CRYPTO: BTC) liquidity onto Cardano using non-custodial collateral and stable coin-based lending.
The Grayscale Allocation
Grayscale’s Smart Contract Fund holds a mixed bag of smart contract platforms, with the largest positions in Solana (CRYPTO: SOL) and Ethereum (CRYPTO: ETH), followed by Cardano, Avalanche (CRYPTO: AVAX), Hedera (CRYPTO: HBAR), and Sui (CRYPTO: SUI).
The recent increase in ADA allocation coincides with Cardano’s accelerated push into Bitcoin DeFi.
Cardano recently fell out of the top 10 cryptocurrencies by market cap, trading at $0.2781 and stuck in a consolidation range.
However, the Bitcoin DeFi angle could differentiate Cardano in a crowded smart contract space.
The Bitcoin DeFi Strategy
Cardano aims to bring Bitcoin liquidity onto its platform using non-custodial collateral and stable coin-based credit and lending structures built to avoid liquidation-driven fragility.
This approach targets both institutions needing predictable, non-liquidating borrowing and retail users seeking high-quality yield on idle Bitcoin.
Crypto analyst Zach Humphries argued Cardano should double down on Bitcoin DeFi as a way to separate itself from competitors. “The smart contract space, it’s super crowded. This is a way that they can delineate themselves and really separate themselves from the rest.”
The strategy could attract Bitcoin maximalists who traditionally avoid altcoins. If Cardano becomes known as the smart contract layer that brings DeFi to Bitcoin, it could tap into the massive Bitcoin community.
Humphries noted that during fearful markets, doubling down on high-conviction plays and assets that have been around for a long time—like Cardano, Solana, and Ethereum—isn’t a terrible approach.
However, he acknowledged the difficulty of figuring out which smart contract platform will ultimately win.
The Technical Setup
ADA is trapped between Fibonacci resistance at $0.2985 and support at $0.2682.
The Supertrend at $0.2886 sits above price in bearish mode, confirming near-term momentum favors sellers.
A descending trendline from January’s $0.4267 peak continues capping rallies around $0.30-$0.32.
Multiple breakout attempts above the Supertrend and $0.288-$0.299 resistance have failed.
Critical support sits at $0.2682. Breaking below triggers a retest of $0.24-$0.25 or the capitulation low around $0.22.
Meanwhile, the RSI at 51.51 sits in neutral territory, confirming lack of directional conviction.
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