- Grayscale has requested the withdrawal of its S1 forms for Cardano, Hedera, and Polkadot ETFs with the SEC.
- The digital asset-focused investment manager only told the regulator that it no longer intends to proceed with their distribution.
- The company continues to account for the largest cumulative withdrawals in the Bitcoin and Ethereum ETF markets.
Grayscale, the world’s largest digital asset-focused investment platform, is winding down its exchange-traded fund (ETF) filings. Recently, the company requested to pull out the S-1 files for its pending Cardano (ADA), Hedera (HBAR), and Polkadot (DOT) ETFs with the US Securities and Exchange Commission (SEC).
Grayscale’s Cardano, Hedera, and Polkadot ETF Withdrawals
According to the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database, Grayscale submitted its request on August 7. It informed the regulator of its intent to withdraw its ETF applications for Cardano, Hedera, and Polkadot effective “at the earliest practicable date.”
The company stated that it no longer wishes to sponsor the abovementioned exchange-traded products (ETPs), which it initially filed with the Commission on August 29 last year. It didn’t provide a more thorough explanation for its withdrawal besides the fact that it no longer intends to proceed with their planned distribution.
The consensus in the crypto community suspects that the decision may be due to the persistently bearish market sentiment. After all, low demand for such products at this point, if it proceeds with their launch, could hurt both the asset manager’s operational efficiency and the market liquidity of the underlying assets.
Some are optimistic that Grayscale might eventually refile the same products once market momentum for their underlying assets recovers.
How ADA, HBAR, and DOT Reacted to the News
The negative announcement didn’t yield a significant movement in the native coins of Cardano, Hedera, and Polkadot. Their respective declines by less than 1% appear to be mainly due to broader market headwinds as Bitcoin (BTC) stagnated in the $65,000 range.
At the same time, economic uncertainty across financial markets continues to weigh on risk-on assets.
Grayscale Bitcoin and Ethereum ETFs
Grayscale currently offers 17 crypto ETFs. In addition to Bitcoin, it includes Avalanche (AVAX), Bittensor (TAO), Ethereum (ETH), Chainlink (LINK), Dogecoin (DOGE), and XRP.
The company’s earliest entries in the US spot crypto ETF market were those that track Bitcoin and Ether. However, its initially converted products have triggered billions of US dollars in net outflows across the sector amid institutional profit-taking and structural capital rotation into alternatives with lower management fees.
Later on, Grayscale launched two new separate ETFs for the said assets with flat 0.15% fees, a considerable reduction from 1.5% in its first spot Bitcoin ETF and 2.5% in its first spot Ether ETF.
