- Grayscale’s request for a spot ETF on Cardano (ADA) has been recognized by the SEC, marking the beginning of the approval process, though experts predict a lengthy wait.
- While a Cardano ETF could boost ADA’s market presence, historical trends suggest that altcoin ETFs may not significantly impact prices as seen with Bitcoin.
The cryptocurrency market continues to evolve as Grayscale takes a significant step towards launching a spot ETF on Cardano (ADA). While this is not yet a final approval, the SEC’s recognition of the request marks the beginning of an analysis process that could lead to ADA’s inclusion in the growing list of crypto ETFs.
The Grayscale Cardano ETF Proposal
Grayscale submitted its request for a spot ETF on Cardano about ten days ago. This ETF, if approved, would use ADA as collateral, similar to existing Bitcoin and Ethereum ETFs.
Currently, the US stock exchanges only support spot crypto ETFs for Bitcoin and Ethereum, with pending proposals for Litecoin, XRP, Solana, and Dogecoin. Given Cardano’s position among the top ten cryptocurrencies by market capitalization, it was only a matter of time before an ETF proposal emerged. Grayscale’s submission is the first of its kind for ADA, but it may not be the last.
Crypto ETFs: What’s Next?
Despite Grayscale’s move, industry experts believe the approval of new crypto ETFs in the US may take several more months. Litecoin (LTC) appears to be next in line, followed by XRP and Solana. Cardano’s ETF, however, might face a longer waiting period, given that its SEC recognition only just happened.
The SEC’s cautious approach stems from regulatory concerns and the speculative nature of altcoins. While Bitcoin ETFs gained massive traction when they launched in January 2024, Ethereum ETFs, which followed in July, have struggled to gain similar momentum. This has led analysts to predict that altcoin ETFs, including Cardano’s, may face a lukewarm reception from traditional investors.
Impact on Cardano’s Price
The excitement surrounding crypto ETFs often leads to speculation about price movements. However, historical trends suggest that altcoins do not always experience significant price surges following ETF approvals. Bitcoin’s spot ETFs helped push its price to record highs of over $70,000, but Ethereum’s price has not yet approached its 2021 peak.
For Cardano, the price has seen volatility in recent months. ADA surged from $0.3 to $1.2 following Trump’s electoral victory in November, only to fall below $1 by the end of December. While it briefly rebounded above $1.1 in mid-January, the ongoing decline has brought it below $0.7. Compared to March 2024, ADA is currently at a lower price level, indicating a continued downtrend.
Will Grayscale’s ETF Give ADA the Push It Needs?
While Cardano supporters hope that an ETF listing could drive up ADA’s value, the reality is more complex. Traditional markets remain cautious about altcoins due to their speculative nature. Unless institutional interest significantly increases, the impact of a Cardano ETF on ADA’s price may be limited.
For now, investors must wait and see how the SEC handles Grayscale’s proposal. If approved, it would mark a milestone for Cardano—but whether it will drive lasting value remains uncertain.
