Why Cardano (ADA) ETF Might Be A Big Thing For Institutional Investors? Expert Explains

Now that the U.S. Securities and Exchange Commission (SEC) has approved spot Bitcoin ETFs in the U.S., the crypto community is speculating on what altcoins will receive the ETF treatment next. Ethereum and XRP are the frontrunners in the altcoin ETF race, but Cardano (ADA), a surprising contender might join them soon.

Popular Cardano advocate ADA Whale (@cardano_whale) on X recently shared an optimistic thread outlining why ADA could be a prime candidate for institutional eyes in this new wave of TradFi integration.

1/More institutional and tradfi money is bound to find its way into crypto soon

Now might be a good time to recap why Cardano exposure is a worthwhile idea to explore for them

The mantra of the majors and every VC coin is repeated to them ad nauseam, but where does $ADA fit in?

— ADA whale (@cardano_whale) January 13, 2024

Cardano’s Allure for Traditional Finance

In a post, ADA Whale painted Cardano as a compelling proposition for institutional investors venturing into the crypto landscape. He highlighted several key reasons we can’t fully cover in this report.

Firstly, Cardano boasts a robust and lightweight proof-of-stake protocol with six years of proven uptime. This peer-reviewed technology ingeniously balances the strengths of the UTXO and PoS models, offering a unique solution to the blockchain trilemma.

Secondly, unlike some “VC-driven chains” susceptible to manipulation, Cardano’s supply distribution remains remarkably inclusive. With founding entities holding just 10% of ADA, the network offers a refreshing level of transparency and decentralization.

Thirdly, Cardano’s staking mechanism stands out as one of the most decentralized in the crypto space. Its vast network of validator nodes effectively shields it from possible 51% attacks.

Fourthly, Cardano prioritizes scalability and innovation, constantly evolving to support a rich ecosystem of decentralized applications (dApps). This commitment has attracted hundreds of native tokens and DeFi projects in recent months, further fueling organic growth.

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Cardano (ADA) ETFs on the Horizon?

Valkyrie co-founder Steve McClurg recently echoed the prospect of altcoin-based ETFs, specifically mentioning Ethereum (ETH) and XRP and hinting at more coming.

Currently, ADA enjoys representation in the Swiss-registered 21Shares Cardano ETF and forms part of both Grayscale Digital Large Cap Fund (GDLC) and Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW).

The ETF craze isn’t isolated, as it has spread to other parts of the world. Hong Kong’s crypto scene is on the verge of an ETF stampede, as eight out of ten companies are in the advanced ETF launch phase.

This existing institutional interest, coupled with Cardano’s robust fundamentals and blossoming ecosystem, paints a promising picture for the potential arrival of a dedicated ADA ETF. With clearer crypto ETF regulation in the U.S., Cardano could find itself at the forefront of the next chapter in cryptocurrency adoption.

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Tobi Loba

Tobi Loba is a passionate writer with a vast interest in the stock market. She joined the crypto ecosystem about three years ago and has written lots of ebooks and articles in relation to cryptocurrency and blockchain projects. Tobi Loba earned her degree at the University of Ibadan.