Grayscale to Offer First-Ever Cardano ETF to Track ADA Token
The ETF would offer traditional investors regulated exposure to the $27.3 billion Cardano blockchain network.
Grayscale has submitted an application to the Securities and Exchange Commission for what would be the first-ever spot exchange-traded fund to track the price of ADA, the cryptocurrency of the Cardano blockchain and ninth largest digital asset by market value.
The filing for the ETF, submitted Monday, would offer traditional investors regulated exposure to the $27.3 billion proof-of-stake blockchain network.
The news comes just days after the SEC acknowledged Grayscale's applications for Solana and Litecoin ETFs, continuing the investment firm's push to expand its crypto ETF offerings.
Last year, the crypto-focused asset manager debuted its Grayscale Bitcoin Trust ETF (GBTC) and Grayscale Bitcoin Mini Trust (BTC) tracking the performance of bitcoin, and its Grayscale Ethereum Trust (ETHE) and Ethereum Mini Trust (ETH) tracking the price of ether, the token of the Ethereum blockchain.
The proposed Grayscale Cardano Trust would hold ADA and track its market price, with shares representing proportional interests in the trust's ADA holdings, according to the filing. The trust structure mirrors Grayscale's bitcoin ETF.
Cardano operates as a proof-of-stake blockchain platform that supports smart contracts, which enable the development of decentralized applications. These so-called dApps have the potential to improve processes in a range of industries.
ADA most recently traded at $0.77, up nearly 10% over the past 24 hours, with a market capitalization of $27.3 billion, according to data provider CoinMarketCap. Bitcoin and Ethereum have $1.9 trillion and $312 billion market caps, respectively.
Cardano's Growth Path
The proposal comes amid increased institutional interest in Cardano. The blockchain processed over $1.5 billion in transaction volume over the past 24 hours and has a total supply of 44.9 billion tokens, according to CoinMarketCap.
The fund would track ADA using the CoinDesk Cardano Price Index, monitoring trading across major US crypto exchanges, including Coinbase, Kraken and Crypto.com, according to the filing.
The ETF would use Coinbase Custody Trust Company as custodian, with the Trust's assets being stored in offline "cold" storage, according to filing documents. Cold storage devices are not connected to the internet and less susceptible to theft.
The ETF faces some unique considerations, as Cardano's ecosystem dealt with security challenges in late 2024 when hackers compromised the Cardano Foundation's social media accounts to spread misinformation. The hackers spread false claims that the foundation was sued by the SEC, crashing the token's price.
If approved, the ETF would require SEC clearance before implementing any redemption program, according to filing documents. The agency has yet to approve any altcoin ETFs beyond Bitcoin and Ethereum.
