Grayscale Seeks SEC Approval for Spot Cardano ETF

Grayscale, through NYSE Arca, has submitted a filing under the Securities and Exchange Act of 1934 to introduce a spot Cardano exchange-traded fund (ETF). 

This filing stands out from previous ones, representing a direct ETF launch rather than a conversion. Grayscale has not yet offered a standalone investment product for ADA, marking a new chapter in its investment offerings.

Grayscale Files For Cardano ETF

The exchange submitted the 19b-4 filing to the SEC on February 10. The proposed ETF aims to offer investors regulated exposure to Cardano. Moreover, if approved, the shares will be listed under the ticker symbol “GADA.”

“While an investment in the Shares is not a direct investment in ADA, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ADA,” the filing stated.

Grayscale’s proposed fund would mark the debut of a US spot ETF for Cardano. This filing comes after Tuttle Capital Management submitted a request for ten leveraged crypto ETFs featuring an ADA fund.

“First one in US and ballpark 60th crypto ETF filed this year so far,” Bloomberg’s senior ETF analyst, Eric Balchunas, posted on X (formerly Twitter).

In addition to Cardano, Grayscale has also filed to convert other existing trusts into spot ETFs, including those for Solana (SOL), XRP (XRP), and Dogecoin (DOGE). Nonetheless, the application faces regulatory challenges. 

The SEC previously categorized Cardano as a security in its lawsuits against Binance and Coinbase, alongside XRP and Solana. These legal obstacles could delay approval, as seen with other altcoin-based ETFs.

That said, recent developments suggest a potential shift in the regulatory stance. Last week, the SEC officially acknowledged the 19b-4 filing for the Grayscale Solana ETF. This move has led analysts to speculate that it could set a positive precedent for other altcoin ETFs, including those for XRP and ADA.

The filing comes after Bloomberg analysts James Seyffart and Balchunas outlined the odds for altcoin ETF approvals. According to their analysis, Litecoin (LTC) has a 90% chance of securing an ETF approval. Furthermore, DOGE stands at 75%,  SOL is at 70%, and XRP is at 65%. Yet, how things will fare for ADA remains to be seen.

Meanwhile, after the news broke, ADA surged by 9.3% on the 24-hour chart. In daily gains, it even outperformed Bitcoin (BTC), Ethereum (ETH), and XRP.

Notably, this rise followed a period of losses. Over the past week, it was down by 4.7%. Furthermore, the last month was also bearish for the altcoin as it dipped by 26.3%. At the time of writing, ADA was trading at $0.75.