Grayscale Cardano Trust Heads to NYSE: Crypto Meets Stock Market
Published Date: 2/28/2025
Notice
Summary
NYSE Arca wants to start listing and trading shares of the Grayscale Cardano Trust (ADA), a new way for investors to buy into Cardano cryptocurrency through the stock market. This change means more people can easily invest in ADA without buying crypto directly. The proposal is fresh and open for public comments, with trading expected to begin soon after approval.
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
NYSE Arca filing to list GADA shares
The NYSE Arca filed on February 10, 2025 (Amendment No. 2 filed February 20, 2025) to list and trade shares of the Grayscale Cardano Trust under NYSE Arca Rule 8.201-E. The Shares are expected to trade under the ticker symbol "GADA" and are designed to give investors exposure to ADA through exchange-listed shares instead of buying ADA directly.
Sponsor fee reduces ADA held (2.5%/yr)
The Trust charges a Sponsor's Fee that currently accrues daily at an annual rate of 2.5%, payable in ADA; the filing says this fee will be lowered if the Trust becomes an ETP. Because fees are paid in ADA, the amount of ADA backing each Share will gradually decrease over time.
Redemptions subject to regulatory approval
The Trust may transfer ADA in exchange for Baskets surrendered for redemption only subject to obtaining regulatory approval from the Commission and approval of the Sponsor. That means redemptions for underlying ADA are conditional on future approvals.
Custody uses Coinbase cold storage protections
The Trust's custodian is Coinbase Custody Trust Company, LLC; private keys are generated in secure ceremonies, encrypted, split into geographic "shards," and stored in cold (offline) vaults. Transfers require combining multiple encrypted key shards and multi-factor procedures.
Trust abandons airdrops and incidental tokens
The Prospectus states that, at this time, the Trust will prospectively irrevocably abandon any Incidental Rights and IR Virtual Currency (for example, tokens received through forks or airdrops) arising from ownership of ADA.
NAV tied to CoinDesk Cardano Price Index
The Trust calculates NAV using the CoinDesk Cardano Price Index (ADX) — the Index Price is the U.S. dollar value of ADA derived from the Digital Asset Trading Platforms in the ADX and is calculated at 4:00 p.m., New York time, on each business day.
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