Grayscale Withdraws Applications for Altcoin ETFs Amid Downturn

The crypto industry is feeling the effects of a prolonged downturn, with over $1 trillion lost in market capitalization. Grayscale Investments has withdrawn its applications for three exchange-traded funds (ETFs) tied to Cardano (ADA), Polkadot (DOT), and Hedera (HBAR). This move comes as interest in altcoins has noticeably cooled, making it less obvious for major asset management companies to launch new stock products based on such assets.

The downturn is affecting more than just Bitcoin, with a 28% decline since the start of the year. The small token index has dropped by over 40%, while Dogecoin, Solana, and ADA have each fallen by about half. Crypto exchanges are delisting entire groups of coins due to weak liquidity, low demand, and declining interest in smaller tokens.

Grayscale's decision does not appear to be a direct result of an SEC rejection. The company had withdrawn the exchange applications for listing these products as early as 2025. With no practical sense in maintaining the S-1 registration forms without an active listing process, Grayscale's move looks more like clearing out its application portfolio amid weak demand.