Event Background and Application Details
On February 10, 2025, Grayscale, the world’s largest cryptocurrency asset management firm, submitted an application to the New York Stock Exchange (NYSE) for a Cardano (ADA) spot ETF. This marks another significant step in the expansion of the cryptocurrency market into mainstream financial products. The application was submitted by NYSE Arca, a subsidiary of NYSE, on behalf of Grayscale. Coinbase Custody will serve as the custodian, and BNY Mellon will act as the fund manager. If approved, this would be the first exchange-traded fund targeting Cardano, following the Bitcoin and Ethereum spot ETFs, and represents Grayscale’s latest attempt to expand its cryptocurrency ETF product line.
This move continues Grayscale’s strategy of promoting the compliance of crypto assets. As early as 2024, the company successfully converted its Bitcoin Trust Fund (GBTC) into a spot ETF and subsequently applied for ETF products for tokens like Solana and XRP. The application for the Cardano ETF specifically emphasizes that the fund will hold ADA tokens entirely and will use clearing mechanisms from regulated platforms like CME to reduce market manipulation risks.
Market Reaction and ADA Price Fluctuations
Following the announcement, Cardano’s native token, ADA, surged 14% within 24 hours, reaching a high of $0.8, making it the top gainer among the top ten cryptocurrencies by market capitalization on that day. This surge reflects the market’s optimistic expectations for the ETF’s approval and highlights institutional investors’ renewed interest in Layer 1 public chains. For short-term investors, platforms like JuCoin can be used to monitor ADA’s price movements and identify opportunities arising from price volatility. Analytical firm Santiment notes that the crypto community’s investment focus is shifting from meme coins to underlying protocols with real technical value. Cardano’s smart contract upgrades and carbon-neutral roadmap make it a new target for institutional allocation.
However, ADA’s short-term performance remains constrained by the macro environment. Affected by expectations of Federal Reserve interest rate hikes and volatility in the U.S. tech sector, the Bitcoin spot ETF experienced a net outflow of $561 million in February, with Grayscale’s own GBTC fund seeing a daily outflow of $46.3 million, indicating increased risk aversion. For the Cardano ETF to replicate the success of the Bitcoin ETF, it must overcome two major obstacles: first, the U.S. SEC’s determination of ADA’s security status; currently, the SEC has not clarified whether Cardano is considered a security, and Grayscale’s application emphasizes ADA’s positioning as a “commodity”; second, the absence of ADA futures on CME, which may undermine the SEC’s confidence in market surveillance capabilities.
Regulatory Challenges and Industry Controversies
Despite the market’s enthusiasm for the Cardano ETF, regulatory resistance remains the biggest variable. When the SEC previously approved Bitcoin and Ethereum spot ETFs, it primarily relied on the price discovery mechanisms of CME futures markets, but ADA has not established a similar derivatives market. In this regard, crypto legal expert Jake Chervinsky points out: “Grayscale’s application will force the SEC to re-examine its regulatory framework for non-Bitcoin tokens, which could become a landmark case in the classification of crypto assets.”
There are also internal industry disagreements regarding the expansion of ETFs. Some analysts are concerned that the launch of too many crypto ETFs could dilute liquidity, especially ETFs for small- and mid-cap tokens, which may exacerbate market volatility. For example, VanEck recently paused its Solana ETF plans to focus on Bitcoin and Ethereum products. However, Grayscale CEO Michael Sonnenshein emphasized in a statement: “Cardano’s technical rigor and community governance model make it an ideal choice for institutional-grade assets. We are working closely with regulators to drive approval.”
Long-Term Impact and Industry Insights
If the Cardano ETF is approved, it could trigger three major chain reactions:
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Accelerated Layer 1 Public Chain Competition: Projects like Solana and Avalanche may follow suit and apply for ETFs, promoting the standardization of public chain technologies.
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Reshaped Token Valuation Models: The entry of institutional funds will strengthen the logic of fundamental analysis and weaken the impact of speculative hype.
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Forced Regulatory Transparency: The SEC will need to clarify token classification standards, potentially leading to new crypto asset regulatory legislation.
For investors, two core indicators should be closely monitored: first, the SEC’s feedback cycle on the 19b4 filing; historical data shows that Bitcoin ETFs take an average of 14 months from application to approval; second, Cardano’s on-chain data, including staking rates and smart contract deployment volumes, as these indicators will directly affect institutional allocation willingness.
Grayscale’s move further confirms the trend of accelerating integration between crypto assets and traditional finance. As Matrixport’s research report states: “ETFs are not only a gateway for funds but also a touchstone for the industry’s compliance process—those who can cross the regulatory threshold will gain an advantage in the next cycle.”
Neason Oliver
