Grayscale Investments has filed for a spot Cardano (ADA) exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC) through NYSE Arca. This might have a significant impact on Cardano price.
The NYSE Arca Rule 8.201-E proposal aims to enable investors to access Grayscale Cardano Trust shares.
Grayscale fought regulators for an extended period before successfully participating in launching the first Bitcoin ETF.
In recent months, Grayscale has rapidly expanded to offer new altcoin ETFs by filing applications for Solana (SOL) and XRP. The Cardano ETF represents an original product since it differs from traditional trusts being transformed into ETFs.
Cardano’s Response to the ETF Filing
The suggested ETF proposal has initiated a significant dialogue among participants in the Cardano community. Cardano’s founder, Charles Hoskinson, approved the news because it demonstrated the platform’s extended longevity and institution-friendly features.
According to Hoskinson, the essential combination of proof-of-stake technology and advanced innovative contracts makes Cardano a prime opportunity for expanding financial adoption.
Cardano’s development company, Input Output Global (IOG,) officially acknowledged the importance of the newly filed ETF.
The company declared that institutional ETF recognition would speed up adoption and development throughout the ecosystem while generating advantages for projects based on the Cardano blockchain.
SEC’s Stance on Altcoin ETFs
The SEC has recently approved Bitcoin and Ethereum ETFs, yet it has shown caution toward altcoin-based ETFs. The SEC expresses its main concerns about market manipulation risks alongside liquidity and securities law compliance issues.
Grayscale’s new filing regarding altcoin spot ETFs faces regulatory uncertainty because the SEC has not approved such products beyond Bitcoin and Ethereum.
The Grayscale ETF structure contains specific features to fulfil regulatory requirements. Coinbase Custody would safely store the Grayscale Cardano Trust’s ADA assets through its cold storage facilities.
As part of its safeguards, the Delaware Trust Company functions as an official trustee that provides institutional oversight of the investment. Price valuation for the ETF will depend on significant exchange data, including Coinbase and Kraken, to maintain traditional market standards.
Cardano Price Impact
The Grayscale Cardano ETF filing caused a surge in Cardano price, reaching $0.80 with a 13% increase. An approved ADA ETF appears likely to transform Cardano’s market position through volatility in its cryptocurrency ranking. Experts say prices could soar to as much as $3 when institutions begin adopting post-approval.
The SEC should spend up to 45 days answering the filing and may continue the assessment beyond this limit.
Approval remains uncertain, but industry experts predict that growing favourable regulatory policies within the new administration will boost the prospects for approval. If Grayscale approves its proposed Cardano ETF, it will define a new era in ADA and all the altcoin markets.
