The U.S. Securities and Exchange Commission (SEC) has acknowledged Grayscale’s filing for a spot Cardano (ADA) exchange-traded fund (ETF). This step marks the beginning of the SEC’s review process, which will determine whether the proposed ETF can be listed and traded on the New York Stock Exchange (NYSE) Arca.
Grayscale’s Spot Cardano ETF Filing Acknowledged
According to a recent filing, the SEC has acknowledged NYSE Arca’s proposal on behalf of Grayscale to list and trade shares of the Grayscale Cardano Trust. This acknowledgment initiates the regulatory review process, signaling the start of the SEC’s evaluation period with odds of aproval on Polymarket rising to 64%.
The acknowledgment was made on February 24, 2025, following the initial submission by NYSE Arca on February 10, 2025. The proposed ETF aims to provide investors with regulated exposure to Cardano (ADA). The ETF would allow investors to buy and sell shares of the Grayscale Cardano Trust, which will track the price of ADA and shares in the trust will represent proportional interests in its ADA holdings, enabling investors to gain exposure to Cardano without directly holding the cryptocurrency.
This move follows Nasdaq filinga proposal to list an ETF holding Hedera Network’s native token, HBAR. Moreover, the optimism is growing due to the SEC’s recently acknowledged half a dozen exchange filings related to cryptocurrency ETFs, covering staking, options, in-kind redemptions, and new types of altcoin funds.
Tracking Cardano Price Through a Comprehensive Index
The proposed Grayscale Cardano Trust would track the price of Cardano through an index that surveys its price daily across multiple cryptocurrency exchanges. These include Coinbase, Crypto.com, Bitfinex, and Kraken.
Consequently, the index was designed to provide a comprehensive view of Cardano’s market value, ensuring accurate price tracking. The exchanges were selected based on their compliance with U.S. federal and state licensing requirements, with Bitfinex included for meeting the minimum liquidity requirement, despite lacking U.S. licenses.
In addition, Coinbase Custody Trust Company is listed as the proposed custodian for the Grayscale Cardano ETF, securing the trust’s ADA holdings with advanced security measures. These include geographically distributed private key storage in secure vaults and encryption techniques.
Concurrently, BNY Mellon Asset Servicing is named as the transfer agent and administrator for the ETF, ensuring efficient management and transparency in operations. The trust will not actively manage its holdings or attempt to mitigate price fluctuations, maintaining a passive investment strategy to track ADA’s market performance.
US SEC Review Process and Potential Timeline
The SEC’s acknowledgment of the filing initiates a regulatory review process expected to conclude by August 2025. This process includes a public comment period lasting between 21 and 30 days, followed by a detailed evaluation to assess the proposal’s compliance with investor protection, market integrity, and fraud prevention requirements.
The SEC is required to reach a final decision within 180 days from the filing date, with the possibility of extending the review period if needed. The acknowledgment of Grayscale’s Cardano ETF filing is part of a broader wave of crypto ETF applications currently under review, including filings related to Solana (SOL), XRP, and Litecoin (LTC).
Grayscale’s application for a spot Cardano ETF as a result highlights the growing interest in cryptocurrency investment products. The firm has been expanding its ETF offerings, having previously launched the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) last year, which track the prices of Bitcoin and Ethereum, respectively.
This move comes amid easing crypto regulations and dropping of crypto cases like Coinbase and Robinhood as a result of new leadership for the agency under acting US SEC chair Mark Uyeda. However, the Cardano price has not recovered despite the news with ADA trading at $0.6833 as of press time, a 8.97% decline from the intr-day high.
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