NYSE Arca has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to list and trade shares of the Grayscale Cardano Trust, paving the way for the first U.S. exchange-traded fund (ETF) tied to Cardano’s ADA cryptocurrency.
Proposed Grayscale Cardano ETF Moves Forward With NYSE Arca Filing
The 19b-4 form filing, submitted under NYSE Arca Rule 8.201-E for commodity-based trust shares, seeks to list the Grayscale Cardano Trust (ticker: GADA). The trust would hold Cardano’s ADA tokens, with each share representing fractional ownership of the assets, minus expenses, according to the Feb. 10 submission with the U.S. Securities and Exchange Commission (SEC).
Cardano, launched in 2017, is a proof-of-stake (PoS) blockchain platform known for its smart contract capabilities. ADA, its native token, ranks among the top cryptocurrencies by market value and supports decentralized applications (dapps) and governance features.
The trust’s net asset value (NAV) would be calculated daily using an index price derived from multiple regulated crypto exchanges, including Coinbase and Kraken. Coinbase Custody would safeguard the assets, while creations and redemptions would occur via cash transactions handled by authorized brokers.
Grayscale’s proposal follows its successful conversion of its Bitcoin Trust into an exchange-traded fund (ETF). The SEC has historically hesitated to approve crypto ETFs beyond bitcoin (BTC), citing concerns about market manipulation and custody risks. However, last July, the U.S. regulator approved ether-based ETFs.
The SEC has 45 days to approve, deny, or extend its review of the filing. If approved, the ETF would provide investors with a regulated avenue to gain exposure to ADA without directly holding the asset.
Though regulatory hurdles remain, the move reflects the growing institutional interest in alternative crypto asset-based products.
Source: Bitcoin
