As the crypto market sees an influx of institutional investment through ETFs, Cardano (ADA) has emerged as a promising candidate, according to enthusiasts. Two key indicators suggesting the possibility of an ADA ETF are the Swiss-registered 21Shares Cardano ETF, its inclusion in the OTC-traded Grayscale Digital Large Cap Fund (GDLC) portfolio, and its feature in Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW).
Contrary to popular belief that Ethereum (ETH) and Ripple (XRP) will be the first altcoins to receive ETF approval, some Cardano enthusiasts hold an optimistic view on the approval of an ADA ETF. One such enthusiast, known as cardano_whale, has shared his positive outlook on the potential benefits for both ADA and institutional investors if an ETF is approved.
First and foremost, the Cardano network is built on peer-reviewed research, which institutional investors value due to the extensive work and research put into the open-source protocol. The commentator describes the blockchain as “the Linux of crypto,” highlighting its solid foundations and stable, secure, and lightweight network that has the potential to power a decentralized world.
The enthusiast discusses the core philosophies underlying the blockchain, such as the blockchain trilemma and inclusive accountability. He also mentions that the standard wallet is an open-source full node that is permissionless and trustless. The analyst further emphasizes Cardano’s revolutionary PoS protocol Ouroboros, which uses extended UTxO (eUTxO) and Nakamoto consensus, making it akin to a programmable PoS version of Bitcoin.
The monetary policy of Cardano is also impressive, with a traditional disinflationary approach. Data reveals that there is a maximum supply of 45 billion ADA, with 35 billion currently in circulation. The majority of ADA, around 88%, was distributed to Asian investors between 2015 and 2017. The analyst notes that block rewards gradually decrease based on the parameter p (currently 0.3%) in every 5-day epoch, making ADA increasingly scarce over time.
Decentralization is another appealing factor for institutional investors considering the Cardano network. The analyst highlights Cardano’s “min attack vector” of 30, which surpasses most other chains in terms of security. Scaling on Cardano involves a combination of parameter changes, improved network and dapp efficiency, Hydra, input endorsers, and more. Other factors that the analyst points out include DeFi innovations, security measures, developer experience, and governance. In 2024, every ADA holder will be able to submit a governance action for voting and ratification.
These developments are expected to attract institutional investors to the Cardano project by showcasing its capabilities and setting the stage for its success. It is important to note that institutional investors are looking for long-term success rather than short-term gains.
The Swiss-registered 21Shares Cardano ETF, its inclusion in the OTC-traded Grayscale Digital Large Cap Fund (GDLC) portfolio, and its feature in Bitwise Investments’ “Bitwise 10 Crypto Index Fund” (BITW) further fuel speculation about the potential for an ADA ETF. Currently, ADA has seen a nearly 9% increase in the last 7 days but has experienced a 2% drop in the last 24 hours.
