The probability of a spot Cardano (ADA) exchange-traded fund (ETF) being approved has surged as investors await a decision from the Securities and Exchange Commission (SEC).
Specifically, market-implied odds for a 2025 approval have risen to 64%, representing a 54% increase in bullish sentiment compared to earlier this year, according to insights from the betting platform Polymarket.
This spike in optimism comes as the SEC approaches a key deadline on May 29 to approve, deny, or extend its decision on Grayscale’s proposed Cardano ETF.
Notably, ADA ETF approval odds fluctuated throughout Q1 and early Q2. However, recent regulatory developments, such as appointing crypto-friendly Paul Atkins as the SEC chair, have strengthened investor confidence.
SEC’s extended ETF decision
On February 24, the SEC acknowledged NYSE Arca’s proposal to list and trade the Grayscale Cardano Trust shares, formally starting the regulatory review process. That triggered a standard 45-day extension, pushing the decision deadline to May 29.
While such extensions are routine, the market appears increasingly hopeful for approval.
Currently, 72 crypto-related ETF applications are pending with the SEC. Only two are Cardano-specific: the Grayscale Cardano Trust and the Tuttle Capital 2X Cardano ETF, a leveraged product.
If approved, these ETFs would mark a significant milestone for ADA, potentially boosting institutional adoption and lending greater legitimacy to the asset.
Meanwhile, momentum surrounding the ADA ETF continues to build, despite controversy involving founder Charles Hoskinson.
On May 7, NFT artist Masato Alexander accused Hoskinson of misusing access during the 2021 Allegra hard fork to transfer 318 million ADA from unclaimed 2017 ICO tokens, with only $7 million allegedly reaching the governance group Intersect.
Despite the short-term bearish sentiment, ADA remains above its 50-day and 200-day moving averages (SMA), indicating a generally bullish trend.
The 14-day Relative Strength Index (RSI) also stands at 50.45, signaling neutral momentum. Despite a Fear & Greed Index reading 71, market sentiment is also neutral, reflecting greed.
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