Cardano surged after Grayscale applied to list an ADA ETF, but regulatory uncertainty remains as the SEC previously classified the cryptocurrency as a security in lawsuits against Coinbase and Binance.

Cardano (ADA) traded over 10% higher at $0.776 during U.S. trading hours Tuesday after briefly rising as much as 15% to touch $0.815. 

On Stocktwits, ADA was among the most-discussed cryptocurrency tickers in the last 24 hours, ranking high in platform activity.

The surge came after Grayscale Investments applied with the U.S. Securities and Exchange Commission (SEC) to list a Cardano exchange-traded fund (ETF) on the New York Stock Exchange (NYSE).

Following the news, Cardano became the best-performing cryptocurrency among the top 10 cryptocurrencies by market capitalization in the past 24 hours, outpacing Bitcoin (BTC) and Ethereum (ETH) gains, according to CoinGecko. 

If approved, the ETF would be the first U.S.-listed product providing regulated exposure to ADA, a development that could increase institutional access to the digital asset.

Grayscale’s filing argues that a Cardano ETF would enhance market competition and simplify investor access to ADA without requiring direct ownership. 

However, the SEC previously classified ADA as a security in lawsuits against Coinbase and Binance – a position strongly contested by the Cardano community.

If regulators maintain this classification, approval for an ETF could face significant challenges.

The Cardano Foundation, in a post on X, said the application shows increasing institutional interest in the network’s blockchain infrastructure and evidence of its scalability, security, and decentralized design.

ADA Sentiment and Message Volume on Feb.11 as of 12:20 p.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around Cardano improved to ‘neutral’ territory accompanied by ‘normal’ levels of chatter. 

One user quipped the stock paring its initial gains was “hard to watch.”

Another said that while ADA’s price was reversing, the Grayscale ETF filing could cause the cryptocurrency to rise again.

Platform data also shows that Cardano has been one of the most actively mentioned cryptocurrencies over the past week.

ADA’s gains come after a month-long downtrend that had pushed ADA's price below $1. Despite the rally, the token remains 74% below its all-time high of over $3.

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