According to a document posted by the New York Stock Exchange (NYSE) Arca, the exchange has submitted a 19b-4 form on behalf of Grayscale, seeking regulatory approval to list and trade shares of the proposed Cardano ETF.
The move aligns with Grayscale’s ongoing strategy to introduce spot ETFs for various digital assets beyond Bitcoin and Ethereum. If approved, this would mark the first standalone investment product for Cardano in the U.S. ETF market.
Grayscale’s Expanding ETF Portfolio
Grayscale has been actively transforming its current trusts into spot ETFs, applying for similar permits for Solana (SOL), Ripple (XRP), and Dogecoin (DOGE). The asset manager has long been a pioneer in the cryptocurrency investment space, having launched the Bitcoin Trust in 2013 and successfully transforming it into an ETF last year. With over 20 crypto-related investment products under management, the business continues to advocate for increased institutional access to digital assets.
A screenshot of Grayscale’s filing for the Cardano ETF. Source: NYSE Regulation
In its filing, Grayscale highlighted the importance of regulatory oversight, stating, “The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest, given that there is a considerable amount of ADA price and market information available on public websites and through professional and subscription services.”
Cardano’s Market Reaction and Regulatory Challenges
After the news of its filing, Cardano’s price also increased, with ADA going up almost 10% in a span of just 24 hours. It performed better compared to Bitcoin (BTC) and Ethereum (ETH) during that period. The increase indicates that investors are now more interested in other cryptocurrency ETFs. The interest was sparked after the SEC approved spot Bitcoin ETFs earlier in the year.
Cardano was trading at around $0.76, up 7.92% in the last 24 hours at press time. Source: Brave New Coin
Despite all the excitement around the filing, there is a large problem regarding regulation. The US Securities and Exchange Commission (SEC) already indicated that Cardano, XRP, and Solana are unregistered securities in cases brought forward by large platforms such as Binance and Coinbase. The tag is likely to make it more difficult to obtain approval of the proposed ETF given that rules regarding digital assets continue to change.
However, recent developments indicate a potential shift in the SEC’s stance. Last week, the regulator officially acknowledged Grayscale’s 19b-4 filing for a Solana ETF, sparking optimism that other altcoin ETFs, including those for Cardano and XRP, may receive similar consideration. Bloomberg analysts James Seyffart and Eric Balchunas have placed the likelihood of approval for Litecoin’s ETF at 90%, with Dogecoin at 75%, Solana at 70%, and XRP at 65%. The probability of a Cardano ETF approval remains uncertain but is gaining traction as institutional interest grows.
Institutional Demand for Crypto ETFs Grows
Grayscale is just one of many large trends in which asset managers must provide more secure means to invest in cryptocurrency. WisdomTree, 21Shares, and Bitwise recently requested spot ETFs that would hold such assets as XRP, Solana, and Litecoin.
Market analysts believe more ETFs beyond just Bitcoin and Ethereum would enable more investors to sell and purchase cryptocurrency. An institutional investor would be more likely to get in on it if a spot Cardano ETF is created, enabling investors to gain exposure to ADA without having to hold it in their portfolio directly.
Outlook: Will the SEC Greenlight Cardano’s ETF?
The SEC’s cautious approach toward approving crypto-based ETFs has been a longstanding obstacle, but the increasing number of filings suggests that regulatory pressure may eventually lead to broader acceptance. If the Cardano ETF is approved, it would mark a milestone in the institutionalization of ADA, potentially paving the way for further adoption within traditional finance.
Crypto communities are optimistic about Grascale’s move for Cardano ETF. Source: TheKingTigerz via X
As investors and industry participants await a decision, all eyes remain on the SEC and its evolving stance on altcoin ETFs. With multiple filings already in progress and growing demand for diversified crypto investment products, the coming months will be crucial in shaping the future landscape of digital asset ETFs in the United States.
Brave New Coin – Read More