The prolonged downturn in the digital asset market, which has erased more than $1 trillion in market capitalization, continues to take its toll—this time on funds designed to attract mainstream investors. Grayscale Investments has in recent days withdrawn its plans to launch exchange-traded funds tied to Cardano (ADA), Polkadot (DOT), and Hedera (HBAR). The applications were withdrawn on August 7 within 190 seconds via an RW form filed with the SEC, according to Bloomberg.
The market decline has affected not only Bitcoin, which has lost 28% since the start of the year, but also other cryptocurrencies. The small-cap coin index has plunged more than 40% in 2026, and well-known tokens such as Dogecoin, Solana, and ADA have lost roughly half their value. Crypto exchanges are delisting entire groups of coins en masse, and trading activity has noticeably contracted. Over the past year, more than 100 crypto projects have shut down, including exchanges, DeFi protocols, and blockchains. The total market cap has shrunk to $1.99 trillion, the lowest level since September 2024.
Grayscale's decision is more strategic than a direct rejection by the SEC. Exchange applications for listing these products were already withdrawn in 2025: NYSE Arca withdrew its application for Cardano in September, and Nasdaq withdrew applications for Polkadot and Hedera in November. Without an active listing process, maintaining S-1 registration forms became pointless.
Analysts also point to weakening demand for altcoins among retail investors, who are shifting toward investments in artificial intelligence, sports betting, and prediction markets. Meanwhile, Grayscale continues to work on other ETFs, including filing an application for a fund based on Worldcoin in July, launching a staking ETF for Hyperliquid, and filing an application for NEAR.
