As the crypto market continues to attract institutional investment through ETFs, Cardano (ADA) has emerged as a promising candidate, according to enthusiasts.
There are two key indicators suggesting the possibility of an ADA ETF. First, there is the Swiss-registered 21Shares Cardano ETF. Second, ADA is included in the OTC-traded Grayscale Digital Large Cap Fund (GDLC) portfolio and the Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW).
Despite the prevailing belief that Ethereum (ETH) and Ripple (XRP) will be the first altcoins to secure ETF approval, Cardano enthusiasts remain optimistic about the approval of an ADA ETF. One such enthusiast, cardano_whale, shared his positive outlook on why an ETF approval would benefit both ADA and institutional investors.
According to cardano_whale, it is only a matter of time before institutional and traditional finance (tradfi) money flows into the crypto market. He believes that now is the perfect time to consider Cardano exposure. Unlike other major cryptocurrencies and venture capital coins, ADA stands out due to its peer-reviewed research and dedication to the open-source protocol. The enthusiast compares the blockchain to “the Linux of crypto,” highlighting its solid foundations and its potential to power a decentralized world.
The enthusiast also discusses the core philosophies underlying the Cardano network, such as the blockchain trilemma and inclusive accountability. He emphasizes that the standard wallet is an open-source full node, which is permissionless and trustless. He also notes that Cardano’s ledger size is much smaller compared to other well-known chains, which promotes decentralization.
The analyst further highlights Cardano’s innovative proof-of-stake (PoS) protocol called Ouroboros, which uses the extended UTxO (eUTxO) model and Nakamoto consensus. This makes Cardano similar to a programmable PoS version of Bitcoin. The enthusiast points out the protocol’s advantages in terms of security and scalability.
The monetary policy of Cardano is also impressive, with a max supply of 45 billion ADA, of which 35 billion is currently circulating. The analyst notes that a majority of ADA tokens were distributed to Asian investors between 2015 and 2017. He also mentions that block rewards gradually reduce based on a parameter called “p” every five days, making ADA increasingly scarce.
Decentralization is another key factor that could attract institutional investors to Cardano. The enthusiast highlights Cardano’s minimal attack vector, which surpasses that of most other chains. He also mentions various factors that make Cardano appealing, such as its scaling solutions, DeFi innovations, security measures, developer experience, and governance. In 2024, every ADA holder will have the opportunity to submit a governance action for voting and ratification.
All these developments make Cardano an attractive investment opportunity for institutional investors who are looking for long-term success rather than short-term gains.
The presence of the Swiss-registered 21Shares Cardano ETF, as well as its inclusion in the Grayscale Digital Large Cap Fund (GDLC) portfolio and Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW), further fuels speculation that an ADA ETF is in the works.
At the time of writing, ADA has seen a nearly 9% increase in the last seven days but has experienced a 2% drop in the past 24 hours.