Cardano ETF Approval Odds Surge 54% Amid Regulatory Optimism

The probability of a spot Cardano (ADA) exchange-traded fund (ETF) receiving approval has surged to 64%, marking a significant increase in bullish sentiment among investors. This surge comes as the Securities and Exchange Commission (SEC) approaches a critical deadline on May 29 to either approve, deny, or extend its decision on Grayscale’s proposed Cardano ETF. The market-implied odds for a 2025 approval have risen by 54% compared to earlier this year, according to insights from the betting platform Polymarket.

This optimism is fueled by recent regulatory developments, including the appointment of crypto-friendly Paul Atkins as the SEC chair. On February 24, the SEC acknowledged NYSE Arca’s proposal to list and trade the Grayscale Cardano Trust shares, initiating a standard 45-day extension that pushed the decision deadline to May 29. While such extensions are routine, the market appears increasingly hopeful for approval.

Currently, there are 72 crypto-related ETF applications pending with the SEC, with only two being Cardano-specific: the Grayscale Cardano Trust and the Tuttle Capital 2X Cardano ETF, a leveraged product. If approved, these ETFs would mark a significant milestone for ADA, potentially boosting institutional adoption and lending greater legitimacy to the asset.

Despite the controversy surrounding founder Charles Hoskinson, momentum surrounding the ADA ETF continues to build. On May 7, NFT artist Masato Alexander accused Hoskinson of misusing access during the 2021 Allegra hard fork to transfer 318 million ADA from unclaimed 2017 ICO tokens, with only $7 million allegedly reaching the governance group Intersect. Hoskinson has denied the allegations, calling them false and affirming that over 99.8% of ICO tokens were redeemed correctly.

The recent developments have had a mixed impact on ADA’s price. At press time, ADA was trading at $0.73, down about 0.5% daily and over 7% weekly. Despite the short-term bearish sentiment, ADA remains above its 50-day and 200-day moving averages (SMA), indicating a generally bullish trend. The 14-day Relative Strength Index (RSI) stands at 50.45, signaling neutral momentum. Despite a Fear & Greed Index reading of 71, market sentiment is also neutral, reflecting greed.