The SEC (Securities and Exchange Commission) of the USA has acknowledged the request from Grayscale to launch a spot ETF on Cardano.
It is not yet the final approval, but only the first step in the agency’s analysis procedure.
The ETF on Cardano by Grayscale
The request from Grayscale was submitted about ten days ago.
This is a normal crypto ETF like there are already others, but this time it will have the cryptocurrency ADA of Cardano as collateral.
Note that as of today on the US stock exchanges, there are spot crypto ETFs only for Bitcoin and Ethereum, although there are several others awaiting approval, such as those for Litecoin, XRP, Solana, and Dogecoin.
Given that ADA is still one of the ten main cryptocurrencies by market capitalization, it was inevitable that someone would propose an ETF for Cardano as well.
That of Grayscale is absolutely the first proposal for a spot ETF on ADA submitted to the American SEC, and it is not certain that others cannot arrive.
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Crypto ETFs
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For now, however, it does not seem that there are realistic chances of approval of new crypto ETFs in the USA shortly.
According to the forecasts of experts in the field, it might indeed take a few more months before new ones are approved.
One of the first seems to be the one on Litecoin (LTC), while secondly there would be those on XRP and Solana.
As for the one on Cardano, the times seem a bit longer, given that the recognition by the SEC arrived only yesterday.
The effect on prices
There is a lot of interest in the crypto markets regarding these new ETFs, but such interest might be unjustified.
On one hand, it is true that the spot Bitcoin ETFs, which landed on the US exchanges in January of last year, achieved rapid and resounding success, but on the other hand, it is equally true that this did not happen for the Ethereum ETFs, which landed on the exchange at the end of July.
It is very likely that the success of altcoin ETFs will replicate that of Ethereum, and not that of Bitcoin, given that in reality Bitcoin follows its own unique path that altcoins generally do not replicate.
It is, however, also true that altcoins often end up following Bitcoin, but in traditional markets, where ETFs are traded, altcoins do not appear to be of particular interest.
It should not be forgotten that altcoins are often primarily speculative instruments in the markets, and traditional exchanges still view this type of speculation with apprehension.
This discussion does not apply only to BTC, and in fact, the effect on the price of Bitcoin from the launch of spot ETFs in January 2024 was sensational, enough to bring it to new all-time highs above $70,000.
Instead, Ethereum has not yet managed to even come close to the all-time highs of 2021, also because the capital from traditional markets that the ETFs were supposed to attract, as happened with Bitcoin, is lacking.
Therefore, the possibility that the listing on the stock exchange of ETFs on altcoins could bring them significant benefits from a price perspective remains very doubtful.
ADA (Cardano) awaits the push from Grayscale’s ETF
Thanks to Trump’s electoral victory in November, the price of ADA had skyrocketed in a few weeks from $0.3 to $1.2, but the climb had stopped there.
Already at the end of December, the price of Cardano’s native cryptocurrency had fallen below $1, only to bounce back above $1.1 shortly after mid-January.
Starting from the end of January, it began a decline that seems to be still ongoing, bringing it back below $0.7.
Although the current price level is still much higher than that of the end of October, it is, however, lower than the minimum of December and January, so it is conceivable that a descending phase is still ongoing.
Note that in March of last year it had risen above 0.7$, so the current price is also lower compared to that of March 2024.
