Crypto asset manager Grayscale Investments has officially filed for a spot Cardano ($ADA) exchange-traded fund (ETF) with NYSE Arca, marking a significant step in institutional crypto adoption. The filing, submitted on February 10 as a proposed rule change (Form 19b-4) to the U.S. Securities and Exchange Commission (SEC), seeks approval to list and trade shares of the Grayscale Cardano Trust under the ticker symbol "GADA." If approved, this would be the first standalone Cardano ETF in the U.S. and could drive broader exposure to ADA among traditional investors.

The proposed ETF would be supported by key institutional partners, including Coinbase Custody Trust as custodian, BNY Mellon Asset Servicing as administrator, and Delaware Trust Company as trustee. The move aligns with Grayscale’s strategy of expanding its crypto investment offerings, following prior filings for Solana (SOL), XRP (XRP), and Dogecoin (DOGE) ETFs. However, regulatory challenges remain a concern. The SEC has historically approved spot ETFs only for Bitcoin and Ethereum, while altcoins like ADA face scrutiny due to previous classifications as securities in lawsuits against Binance and Coinbase.

Despite these regulatory uncertainties, the market reacted positively to the announcement, with ADA surging by over 12% following the news and currently trading around $0.75. Analysts suggest that recent shifts in the SEC’s approach, particularly under acting Chair Mark Uyeda, may increase the chances of approval. Bloomberg’s ETF analysts have estimated a growing likelihood of altcoin ETFs gaining regulatory clearance, with Litecoin (LTC) leading at a 90% approval chance, followed by Dogecoin (75%), Solana (70%), and XRP (65%).

The filing also comes amid a broader push for altcoin ETFs, with firms like WisdomTree, Bitwise, and 21Shares recently submitting applications for XRP spot ETFs. Meanwhile, European markets have already seen Cardano-based exchange-traded products (ETPs), including Virtune AB’s launch on Nasdaq Helsinki and Tuttle Capital’s filing for a 2x leveraged ADA ETF. This global interest highlights the growing demand for crypto-based investment vehicles.

With Cardano’s price showing signs of recovery after a bearish month, the ETF filing could provide a catalyst for further market momentum. Analysts note that ADA’s technical indicators, including its relative strength index (RSI) and open interest-weighted funding rate, suggest increasing bullish sentiment. If approved, the Cardano ETF could enhance liquidity, drive institutional participation, and solidify ADA’s position as a key asset in the evolving crypto investment landscape.