The cryptocurrency market received a significant development last week when the U.S. Securities and Exchange Commission (SEC) made a decision about Grayscale’s Cardano ($ADA) Exchange-Traded Fund (ETF) proposal.
The SEC opted not to make a decision about whether to approve, deny, or seek further proceedings on the ETF, and instead extended its review period by an additional 45 days. The new decision date—now probably a good indicator of when the SEC makes a lot of big decisions—has been set for May 29, 2025.
The Extended Review Timeline and Key Dates
Grayscale, a leading digital asset management company, initially submitted its request to establish a Cardano ETF on February 10, 2025.
The request was officially published in the Federal Register on February 28, 2025, signaling the beginning of the review process by the SEC. However, on March 11, 2025, the SEC announced it would push back the decision and extend the review period by 45 days. The Commission cited the need for more time to examine the request in detail as the reason for the extension.
The SEC now has until May 29, 2025, to decide whether the ETF is good to go; they have given themselves more time than is typical in their recent history. The SEC typically is very cautious and thorough in its penny-perfect review of all things ETF, especially when it wades into the unregulated waters of cryptocurrencies. This delay plays right into that cautious and thorough approach.
In terms of the wider timeline, we need to look at the important upcoming dates for Grayscale’s proposal of a Cardano ETF.
February 10, 2025: Proposal submitted by Grayscale.
– February 28, 2025: Proposal published in the Federal Register, initiating the official review process.
– March 11, 2025: The SEC announces a 45-day extension of the review period.
– April 14, 2025: First deadline for the SEC’s decision (now extended).
– May 29, 2025: New deadline for the SEC to approve or reject the proposal, or potentially extend the review again.
– August 27, 2025: Possibility of a second extension, marking the 180-day review period.
– October 26, 2025: Final deadline for the SEC to make a decision on the proposal, at the 240-day point.
This elongated timeline showcases the obstacles encountered in setting up a kind of comprehensive ‘framework’—or, if you will, a ‘template’—for cryptocurrency-based financial products. The SEC’s tilt these days toward conservatism, as well as the indecisive state of crypto ETF approval generally, makes it hard to see a clear path forward for the Cardano ETF.
The Significance of Grayscale’s Cardano ETF Proposal
A Bitcoin ETF is the Holy Grail of crypto investment products. When I say that, I don’t mean to suggest that Grayscale’s ETF proposal is somehow inferior or that this new milestone on our journey toward a world of crypto investment products isn’t significant. It is very significant, and in my mind, it’s a reasonable step forward on the way to constructing the Bitcoin ETF.
A significant victory would be Grayscale and Cardano, whose $ADA token is one of the most popular and much-traded cryptocurrencies around. Grayscale manages a bunch of digital asset funds already, including the trust that holds Bitcoin, the trust that holds Ethereum, and various other forms of digital dosh. An ETF that holds Ada would help us figure out whether or not the Grayscale trusts are good (or bad) vehicles for institutional investors.
Yet, the SEC has a long history of being careful, even slow, to approve ETF products that are tied to cryptocurrencies. The agency has consistently pointed to a number of factors when explaining its hesitation, among them: alleged problems with market manipulation; the not-so-stable nature of cryptocurrencies; and concerns that investors in these products would not be adequately protected. The SEC has, to date, either rejected or delayed a number of proposals for Bitcoin and Ethereum ETFs, though in late 2021 it allowed for the Bitcoin Futures ETF to go ahead.
Regulatory Hurdles and Market Expectations
Grayscale’s proposal for a Cardano ETF is not given an expedited review, and this fits in well with the SEC’s overall cautious approach to reviewing applications for cryptocurrency-linked products. The commission seems to really want to scrutinize very carefully before it gives any sort of blessing to products that might be as risky for investors as the underlying assets involved.
Market analysts are watching the SEC’s decisions about cryptocurrency ETFs very closely, because they are likely to set precedents for future applications. The potential approval of a Cardano ETF could signal a move toward much greater acceptance of cryptocurrency as a “normal” asset class. But the SEC, under Gary Gensler, might simply be a hard nut to crack, imposing still more stringent requirements that force applicants to deal with issues like these:
— Market manipulation
— Custody solutions
— Overall market infrastructure
And to the above list of concerns, some observers might suggest these issues are involved as well:
— Investment in a public good
— Insurance against a “good” disaster (i.e., a security problem with the overall infrastructure)
— App in the Cardano ecosystem.
For Cardano fans and investors, the decision that is yet to be made is an opportunity and a challenge. If approved, it could greatly spur institutional adoption, which in turn could drive both the price and demand of $ADA much higher. If not approved, the decisions made could very well continue to highlight the appearance of an uncertain regulatory landscape that crypto assets seem to be mired in.
What’s Next for Grayscale’s Cardano ETF?
Until May 2025, the review period extends, and Grayscale and Cardano supporters remain, if not hopeful, at least cautiously aware of what seems to be a continuing uphill battle. They’re not going to win any lotteries; they’re not going to win this case or conversely lose it, anymore than they would win the cash by being a subscriber to a magazine that reaps the benefits of forbidding the state’s payment in cash. During the review period, they might similarly avoid the state and just be cash-less.
Currently, investors and market players must keep watch on this developing story, which could see additional extensions, as the SEC wrestles with the challenge of bringing the world of the cryptocurrency into compliance with the restructuring we call traditional financial markets. As they always do, market participants watch this one closely, knowing that the eventual decision could have some big-time implications for the future scene of investment products that pay off in cryptocurrency.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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