Grayscale Abandons Altcoin ETF Plans as Cardano Nears Eligibility

Grayscale quietly withdrew its registrations for three altcoin ETFs on August 7, just two days before Cardano became eligible for a spot ETF under the SEC's generic listing standards. The company filed Form RW with the SEC to withdraw its Cardano Trust ETF registration at 4:33 p.m. Eastern, followed by the Hedera Trust ETF and Polkadot Trust ETF within minutes.

The decision came as Cardano's CME futures contract was set to complete its six-month seasoning period on August 9, which would have allowed a spot $ADA ETF to list under the SEC's streamlined review. However, Grayscale chose not to wait for this milestone and instead exited the altcoin ETF race.

The economics of launching an altcoin ETF may be the reason behind Grayscale's withdrawal. With tepid institutional interest in assets like Cardano, Polkadot, and Hedera, the costs of launching an ETF, including legal fees and marketing expenses, may outweigh potential revenue from management fees.