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- As institutional investment finds its way into the crypto market through ETFs, Cardano enthusiasts have highlighted Cardano (ADA) as an ideal candidate.
- Two key indicators that an ADA ETF is in the pipeline are the Swiss-registered 21Shares Cardano ETF, the OTC-traded Grayscale Digital Large Cap Fund (GDLC) portfolio, and featuring in the Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW).
Amidst growing discussion around altcoin ETFs, some Cardano enthusiasts have shared an optimistic view on an ADA ETF being approved. This goes against the popular narrative that Ethereum (ETH) and Ripple (XRP) will be the first altcoins to get ETFs approved.
ADA enthusiast by the name of cardano_whale, has shared his optimistic views on why it would be equally beneficial for ADA and institutional investors if an ETF is approved.
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
For starters, at its core, the Cardano network is based on peer-reviewed research. Institutional investors will appreciate the amount of work and research dedicated to the open-source protocol. The commentator notes that many view the blockchain as “the Linux of crypto.” He notes that it lacks sexy marketing but stands on rock-solid foundations “on a stable, secure, lightweight network that can power a decentralised world.”
The enthusiast discusses the core philosophies underpinning the blockchain. These include blockchain trilemma and inclusive accountability. He adds, “Standard wallet is an open source full node: permissionless + trustless. Ledger size: 160GB, other well-known chains >1000x that, hurts decentralisation.”
The analyst further highlights its revolutionary PoS protocol Ouroboros uses extended UTxO (eUTxO) and Nakamoto consensus. This makes it like a programmable PoS version of Bitcoin. He explains;
Resilient and with many advantages for security + scalability (by for instance using local state accounting, facilitating parallelisation)
Its monetary policy is also impressive with its traditional disinflationary policy. Data shows that there is a max supply of 45bn ADA of which 35bn is circulating. Speaking of distribution, it is clear that a majority, about 88% went to Asian investors between 2015 to 2017 The analyst notes, “Block rewards reduce gradually based on the parameter p (currently 0.3%) in every 5 day epoch, so ADA is very gradually getting more scarce.”
Decentralization is also a major factor that might attract institutional investors to the network. He notes that “Cardano’s “min attack vector” of 30 beats almost any chain I know.”
Scaling on Cardano utilizes a mix of parameter changes, increased network plus dapp efficiency, Hydra, input endorsers, and more. Other factors highlighted by the analyst include; DeFi innovations, security, dev experience, and governance which he notes in 2024, every ADA holder can submit a governance action to be voted on and ratified. Additionally, a long list of Dapps, wallets, and improving tools and analytics.
19/Governance. 2024 brings us governance. Every ADA holder can submit a governance action to be voted on and ratified
An era full of challenges to be sure, but incredibly exciting. Cardano to be one of the few major L1s with true governance and decentralisation pic.twitter.com/7mN0R7phcG
— ADA whale (@cardano_whale) January 13, 2024
These are some of the highlighted developments that will ultimately attract institutional investors to the project. They demonstrate Cardano’s capability and pave the way for its success. Of note, institutional investors will not be seeking short-term gains but will look to the long-term success of a project.
Fueling speculation that an ADA ETF is in the pipeline is the Swiss-registered 21Shares Cardano ETF. Additionally, it holds a position in the OTC-traded Grayscale Digital Large Cap Fund (GDLC) portfolio and is featured in Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW).
At the time of press, ADA is up by nearly 9% in the last 7 days but has suffered a 2% drop in the last 24 hours.
