Grayscale’s Spot Cardano ETF: A Milestone Move

By filing for a spot Cardano ETF, Grayscale aims to bring ADA directly into the U.S. spot ETF market for the first time ever.

Grayscale has filed with the U.S. Securities and Exchange Commission (SEC) to launch a spot Cardano (ADA) exchange-traded fund (ETF). This marks the first time a spot crypto ETF application has been filed for ADA.

The application, filed on Friday, is a 19b-4 form with the SEC. It serves as a formal request to the agency for a rule change that would allow ADA to be listed on an exchange.

While this is a significant step in the process, it's important to note that the approval of a 19b-4 form does not automatically guarantee the launch of an ETF. Grayscale will still need to file an effective S-1 registration statement with the SEC before trading can officially begin.

This news had an immediate impact on the market, with ADA surging nearly 14% within 24 hours of the announcement. As of February 11, ADA was trading at $0.80, surging to as high as $0.84 at one point on Saturday.

Despite this strong rally, ADA still remains 76% below its all-time high of $3.10, which was reached in September 2021. However, the price movement signals strong optimism among investors regarding the potential for altcoin ETFs to gain mainstream traction.

Grayscale's filing is also part of a broader trend in the crypto industry. According to Bloomberg ETF analyst Eric Balchunas, this is roughly the 60th crypto ETF filing this year alone.

The filings highlight the aggressive race by asset managers to gain regulatory approval for their crypto ETFs, especially in light of the shifting regulatory dynamics and the SEC's evolving stance on crypto ETFs.

The optimism extends to other altcoin ETFs as well. Bloomberg analysts James Seyffart and Eric Balchunas estimate a 90% chance of approval for a Litecoin ETF and 70% for a Solana ETF, both of which have pending 19b-4 filings.

The final decisions for these ETFs are expected on October 2 for Litecoin and October 25 for Solana. Moreover, the odds of approval for XRP and Dogecoin ETFs are estimated to be 65% and 70%, respectively, by the analysts.