- The SEC acknowledged Grayscale’s filing for a spot Cardano (ADA) ETF, starting the official review process.
- The ETF will track ADA’s price, allowing investors to gain exposure without directly holding the cryptocurrency.
- The SEC’s decision is expected by August 2025, alongside other pending crypto ETF applications.
The U.S. Securities and Exchange Commission (SEC) has acknowledged Grayscale’s application for a spot Cardano (ADA) exchange-traded fund (ETF). This step marks the start of the regulatory review process to determine whether the ETF can be listed on the New York Stock Exchange (NYSE) Arca.
The SEC’s acknowledgment was made on February 24, 2025. NYSE Arca submitted the proposal on behalf of Grayscale on February 10, 2025. If approved, the ETF will offer investors regulated exposure to Cardano without requiring them to own ADA directly. Investors will be able to buy shares in the Grayscale Cardano Trust, which will track ADA’s market value.
ETF Tracks Cardano’s Price Using a Market Index
The proposed ETF will track the price of ADA using an index that gathers information from several exchanges for every cryptocurrency. The selected platforms include Coinbase, Crypto.com, Kraken and Bitfinex. These were selected based on liquidity levels and regulation of trading within the United States.
Coinbase Custody Trust Company has been named as the custodian for the ETF’s ADA holdings. It will secure the assets using encrypted, geographically distributed private key storage. BNY Mellon Asset Servicing will act as the transfer agent and administrator, ensuring smooth fund management.
The ETF will be passive in terms of investment management and selection of its underlying securities. This means that it will not speculate in the stocks or try to hedge in the market either. Instead, its key will be in measuring the market performance of ADA accurately.
SEC’s Review Process and Expected Timeline
The SEC’s acknowledgment of the filing has triggered a regulatory review process. This process includes a public comment period lasting between 21 and 30 days. Regulators will then evaluate the ETF’s compliance with investor protection and market integrity requirements.
The SEC is required to make a final decision within 180 days of the filing date. However, the review period may be extended if necessary. The acknowledgment of Grayscale’s ETF filing is part of a larger wave of crypto-related ETF applications. Other pending applications include ETFs for Solana (SOL), XRP, and Litecoin (LTC).
Market Response and Regulatory Developments
Grayscale is expanding its options in crypto-Es posting additional ETF products. The firm has in the past introduced the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) as well. These are products that trade in line with the price of Bitcoins and Ethereum respectively.
However, recent regulations in the United States have shown a more optimistic outlook for crypto ETFs. The US Securities and Exchange Commission, under SEC acting chair Mark Uyeda, has dismissed cases against Coinbase and Robinhood. However, there is not an impressive reaction from ADA in terms of price elevation. At the time of writing, ADA has a price of $0.6833 down from the partly intraday high of -8.97%.
