Shock on the crypto ETF market! On August 7, Grayscale withdraws three ETF files within 190 seconds. No official reason has been communicated by the institutional investment giant. Nevertheless, this massive withdrawal already raises questions about the future of altcoin ETFs in the United States.
In brief
- Grayscale withdrew its three crypto ETF applications for Cardano, Hedera and Polkadot in only 190 seconds, on August 7.
- The documents filed with the SEC give no commercial or regulatory explanation.
- Other Grayscale crypto ETF projects like Bittensor and Zcash remain active and at an early stage.
A lightning withdrawal that leaves the SEC speechless
The documents filed with the SEC are formal. At 4:33:37 PM, Grayscale files the first RW Form to withdraw the Grayscale Cardano Trust ETF. 78 seconds later, it’s the turn of the Grayscale Hedera Trust ETF. At 4:36:47 PM, the Grayscale Polkadot Trust ETF meets the same fate. In all: three crypto ETFs massacred in less than four minutes.
Each document moreover uses the same phrase:
Grayscale does not intend to continue the proposed distribution of shares.
These are thus voluntary withdrawals under Rule 477, not a SEC rejection.
For now, Grayscale Investments has provided no official explanation. That said, various hypotheses are already circulating within the crypto community:
- The first concerns potentially weak investor demand for single-asset spot ETFs on ADA, HBAR, and DOT.
- The second suggests a strategic decision to focus resources on priority projects, such as the Worldcoin ETF filed in July or the already launched Hyperliquid Staking ETF.
- A third, more structural hypothesis points to the current regulatory complexity in the United States.
Two days before these withdrawals, Grayscale analysts had indeed warned of the risk of a “crypto exodus” if the CLARITY Act was not adopted by the Senate.
A reversal for Grayscale’s crypto ETFs
The recent decision by Grayscale contrasts with the momentum gained earlier this year. The company had in fact filed its crypto ETF applications for Cardano and Polkadot, alongside a broader wave of filings from other asset managers.
The associated listing proposals had in fact already been withdrawn by the exchanges themselves. NYSE Arca abandoned the Cardano one in September last year and Nasdaq those of Hedera and Polkadot in November.
Despite these withdrawals, Grayscale also does not seem to be totally disengaging from the crypto ETF market. Proof of this: it continues to push other projects, notably on Bittensor, Aave, BNB, NEAR Protocol and Zcash. Their Registration Statements are still under review.
