The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Grayscale’s highly anticipated spot ETFs for Avalanche (AVAX) and Cardano (ADA), leaving investors in suspense. This delay adds to a growing list of deferred crypto ETF applications, amplifying market uncertainty and sparking price volatility.
SEC Extends Review Period for Cardano and Avalanche ETFs
According to a recently published SEC document, the regulator has chosen to extend its review of Grayscale’s proposals for both the Avalanche and Cardano ETFs. Grayscale initially filed to convert its existing Avalanche Trust into a spot ETF and submitted a separate application for a Cardano ETF earlier this year.
Market expectations had been building around a potential approval, especially for the Cardano ETF. Forecasting platform Polymarket had even estimated a 71% chance of success. However, the latest delay throws cold water on that optimism, with the SEC citing the need for more comprehensive evaluation and public input.
With no clear timeline now in place, the SEC has opened the floor to public comments, allowing stakeholders to weigh in on the proposed rule changes. This procedural move hints at a prolonged process that may stretch well beyond the summer months.
ADA and AVAX Prices React Bearishly to SEC News
Cardano’s price took an immediate hit following the delay, falling nearly 4% to hover around $0.73. Despite seeing over 50,000 transactions in May, ADA’s trading volume dropped by 14%, reflecting a dip in market sentiment.
Avalanche faced similar pressure, with AVAX dropping by more than 2.5% in the past 24 hours. Its trading volume declined nearly 20%, a signal that institutional and retail traders alike are treading carefully in response to regulatory indecision.
These delays come at a time when the SEC is already under scrutiny for repeatedly stalling spot crypto ETF approvals. The recent deferral of the CoinShares XRP ETF suggests a consistent trend of regulatory hesitation, especially around newer Layer 1 protocols like Cardano and Avalanche.
While Grayscale remains committed to pushing these applications forward, the broader crypto industry continues to demand clearer guidelines and more equitable treatment for altcoin-based ETFs.
