The US Securities and Exchange Commission (SEC) has officially acknowledged NYSE Arca’s rule change application for a Grayscale Cardano ETF. This step significantly increases the chances of approval. The proposed investment product will track ADA, the ninth-largest cryptocurrency by market cap.

On February 10, NYSE Arca submitted a 19b-4 application with the SEC, aiming to list and trade shares of the Grayscale Cardano Trust. The updated filing on February 20 prompted the SEC’s acknowledgment.

Cardano ETF to Offer Institutional and Retail Exposure

The Grayscale Cardano ETF will provide investors with an alternative way to gain exposure to ADA. Coinbase will serve as the custodian, while BNY Mellon will handle administration and transfer agent duties.

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With the SEC’s acknowledgment, the application enters a public comment phase. The regulator will accept comments for 21 days, closing in mid-March. After this, the approval process moves to the next stage. If the ETF progresses, NYSE Arca must file an S-1 form with necessary amendments before receiving final approval.

Shifting Regulatory Landscape Favors Crypto ETFs

A year ago, launching a new spot crypto ETF in the US seemed unlikely. The SEC, under Chair Gary Gensler, had classified Cardano and Solana as unregistered securities. Ongoing litigation with Ripple also blocked an XRP ETF.

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However, the landscape is shifting. The SEC has advanced several altcoin ETF applications, with Litecoin and Hedera products nearing approval. The agency has also acknowledged ETF filings for XRP, Dogecoin, and Solana.

Analysts predict that altcoin ETFs will drive capital inflows, potentially impacting prices similarly to Bitcoin ETFs. If approved, the Grayscale Cardano ETF could mark a turning point for institutional crypto investments.