ADA shorts spike as Midnight targets £250M tokenized deposits

ADA shorts hit the highest level since June 2023, with short interest rising again on 25 March 2026. Traders interpreted the move as renewed bearish positioning ahead of a key week for the Cardano-linked ecosystem. The article links the pressure to weak price action, modest on-chain growth, and Santiment data showing Cardano average wallet activity is at a loss over the past year. At the same time, Midnight Foundation announced a partnership with UK-regulated Monument Bank. The plan is for Monument to become the first UK-regulated bank to tokenize retail customer deposits on a public blockchain, with the first phase targeting £250 million in tokenized deposits. The deposits are described as fully backed and redeemable in GBP, represented as interest-bearing digital tokens. Midnight also says its privacy infrastructure will shield transaction data and share it only with authorized participants, aiming for compliance-friendly transparency rather than anonymous activity. Cardano CEO Charles Hoskinson called it one of the company’s largest deals, suggesting it could add significant TVL to the Midnight ecosystem. However, ADA demand is not expected to flow directly because Midnight uses its own token design. Still, traders are watching whether this regulated finance use case can shift attention away from persistently low Cardano activity. Key takeaway for traders: ADA shorts are elevated, but the £250M Monument plan could become a sentiment catalyst if it credibly translates into real institutional adoption—especially around Midnight’s launch timeline.