Grayscale Seeks SEC Nod for Cardano ETF

NYSE Arca, on behalf of Grayscale, has submitted a 19b-4 form to establish the proposed Grayscale Cardano Trust Fund. The filing, made on Monday, indicates that Coinbase Custody Trust Company, LLC will serve as the trustee, while BNY Mellon Asset Servicing will act as the asset manager.

In the filing, NYSE Arca stated that the proposed rule change would facilitate the listing and trading of an additional type of exchange-traded product, specifically the first such product based on ADA (Cardano). This move is expected to enhance competition among market participants, benefit investors, and the market as a whole.

The submission of this application comes amidst a growing interest in cryptocurrency exchange-traded funds (ETFs) and a broader trend of institutional investors increasingly engaging with the digital asset class. As the regulatory landscape continues to evolve, the potential approval of a Cardano ETF could further boost the credibility and accessibility of cryptocurrencies in the eyes of mainstream investors.

Grayscale, a leading digital asset management firm, has been at the forefront of this trend, having already launched several successful cryptocurrency trusts, including the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE). The proposed Cardano Trust Fund, if approved, would be another significant milestone for the company and the broader cryptocurrency industry.

The Cardano blockchain, developed by Input Output Hong Kong (IOHK), has gained traction in recent years due to its unique proof-of-stake consensus mechanism, Ouroboros. The platform aims to provide a more scalable, secure, and sustainable alternative to other blockchain networks. The potential listing of a Cardano ETF could further drive interest and adoption of the Cardano blockchain and its native cryptocurrency, ADA.

The approval process for the proposed Cardano ETF will involve a review by the U.S. Securities and Exchange Commission (SEC). The SEC has been cautious in its approach to cryptocurrency ETFs, but recent developments, such as the approval of the first U.S. Bitcoin futures ETF in October 2021, suggest that the regulatory environment may be shifting in favor of digital assets.

As the cryptocurrency market continues to evolve, the potential approval of a Cardano ETF could have significant implications for both the Cardano blockchain and the broader cryptocurrency industry