Grayscale Files to Convert Cardano Trust Into a Spot ADA ETF
Grayscale Investments has filed with U.S. regulators to convert its Cardano Trust into a spot Cardano (ADA) exchange-traded fund, according to a filing cited by CryptoRank on May 11. The move follows Grayscale’s earlier successful conversions of its Bitcoin and Ethereum closed-end trusts into spot ETFs.
If approved, the product would give U.S. investors regulated exchange access to ADA without requiring them to hold the token directly. Cardano ranks among the top 15 cryptocurrencies by market capitalization.
The Filing and What It Asks For
The application seeks to register the converted product under existing ETF rules and list it on a U.S. national securities exchange.
Grayscale’s trust-to-ETF conversion model works by transforming a closed-end fund, which trades at a premium or discount to its net asset value, into an open-end ETF structure that can create and redeem shares at net asset value. That structural shift eliminates the persistent discounts that plagued Grayscale’s products before the SEC approved conversions.
The conversion filing does not contain a timeline for SEC review, and approval is not guaranteed. The SEC has approved spot cryptocurrency ETFs for Bitcoin and Ethereum but has not yet granted approval for any other single-asset spot crypto ETF.
The commission is also reviewing similar applications from other asset managers covering tokens including Solana (SOL), XRP (XRP), and Litecoin (LTC).
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What Grayscale Is and How Its Conversions Work
Grayscale, a subsidiary of Digital Currency Group, is the largest cryptocurrency asset manager in the United States by assets under management. The firm built its business on closed-end trust products that allowed accredited investors to gain exposure to cryptocurrency through traditional brokerage accounts.
The trusts traded over the counter on secondary markets and frequently traded at steep discounts to the value of the underlying assets they held. Grayscale’s Bitcoin (BTC) Trust converted to a spot ETF in January 2024 after the SEC approved the first wave of spot Bitcoin ETFs.
The firm’s Ethereum (ETH) Trust followed later in 2024 under a separate approval round. Both conversions were contentious.
Grayscale’s GBTC product experienced significant outflows after conversion as investors who had held at a discount took profits at net asset value. The firm subsequently launched a lower-fee Bitcoin Mini Trust to retain cost-sensitive investors.
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Background: The Cardano Protocol and ADA
Cardano is a proof-of-stake blockchain developed by IOHK, founded by Ethereum co-creator Charles Hoskinson.
The network launched its mainnet in 2017 and has since grown to support smart contracts, decentralized applications, and a staking ecosystem with millions of active delegators. Cardano’s design philosophy prioritizes peer-reviewed academic research, which has made development cycles longer than competitors but has also produced a technically rigorous base layer.
ADA is the native token used to pay transaction fees, participate in staking, and vote on protocol governance. The token has traded between $0.40 and $1.40 over the past 12 months, reflecting broader market swings and investor uncertainty about Cardano’s pace of ecosystem development relative to faster-moving chains like Solana (SOL).
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What Approval Would Mean for ADA
A spot ADA ETF approval would mark the first time the SEC had cleared a spot ETF for a proof-of-stake blockchain token.
That distinction matters because proof-of-stake tokens, where holders lock up assets to validate transactions, carry characteristics that some SEC officials have argued resemble investment contracts under the Howey test. SEC Chair Paul Atkins has signaled a more accommodating posture toward cryptocurrency products than his predecessor, and multiple applications for non-Bitcoin spot ETFs are advancing through the review process.
Approval would likely bring institutional capital into ADA, compressing the spread between Cardano’s current trading volume and its market cap rank. It would also pressure competing asset managers to accelerate their own Cardano-related product filings.
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