Grayscale's Cardano ETF eyes $25 billion market

NYSE Arca has filed a proposal with the SEC to list and trade shares of the Grayscale Cardano Trust under the ticker GADA.

This move marks one of the first attempts to introduce a Cardano-focused (CRYPTO:ADA) investment vehicle to U.S. investors.

The proposed ETF seeks to provide investors with exposure to Cardano (ADA) through traditional stock market channels.

Grayscale Operating, LLC and Grayscale Investments Sponsors, LLC are sponsoring the trust, which would hold ADA directly, with each share representing proportional ownership of the underlying assets.

Share pricing will be based on ADA’s value as measured by the CoinDesk Cardano Price Index (ADX).

According to the filing, the ETF aims to offer a simplified investment avenue for those who find direct crypto custody challenging.

The Cardano ETF proposal falls under NYSE Arca Rule 8.201-E, which allows listing "Commodity-Based Trust Shares."

The Delaware Trust Company is set to serve as the trustee, while Coinbase Custody Trust Company will hold ADA in cold storage.

The filing has sparked enthusiasm among crypto traders and investors, with many viewing it as a significant step toward mainstream adoption of Cardano.

The potential ETF approval could lead to increased liquidity and broader accessibility for institutional investors seeking exposure to ADA.

The SEC previously classified ADA as a security in its 2023 lawsuits against Binance and Coinbase.

According to Bloomberg analysts, existing legal hurdles might delay any attempt to list a spot ADA ETF or similar investment product.

"The proposed rule change will facilitate the listing and trading of an additional type of exchange-traded product, and the first such product based on ADA, which will enhance competition among market participants, to the benefit of investors and the marketplace," wrote NYSE Arca in the filing.

Grayscale has been actively pushing for more crypto ETFs, having recently filed to convert existing trusts into ETFs for Solana (CRYPTO:SOL), XRP (CRYPTO:XRP), and Dogecoin (CRYPTO:DOGE).

At the time of reporting, the Cardano (ADA) price was $0.7964.