Grayscale Boosts Cardano Allocation as Bitcoin DeFi Strategy Gains Traction

TLDR

• Grayscale increased its Cardano allocation in the Smart Contract Fund as part of its latest portfolio shift.
• Zach Humphries stated that many traders may underestimate ADA’s long-term potential despite recent volatility.
• The analyst said Cardano’s focus on Bitcoin DeFi could set it apart from other smart contract networks.
• He explained that Bitcoin-driven liquidity could improve ADA’s appeal to institutions exploring new exposure.
• Cardano advanced its Bitcoin DeFi work through a live BTC swap demo and the launch of the Cardinal protocol.

Cardano gained fresh attention as Grayscale raised its ADA weighting while analyst Zach Humphries pointed to rising Bitcoin DeFi activity, and he argued that current market conditions present a chance for accumulation as ecosystem development continues.

Grayscale and Cardano Allocation Shift

Grayscale raised its Cardano allocation within its Smart Contract Fund and drew interest across the market. The fund lifted ADA’s share from 19.50% to 19.55% and later moved it to 20.07%.

Humphries said the steady adjustment shows continued confidence from the asset manager. He added that many traders may overlook ADA’s long-term position. He noted that changing market flows often cause short-term exits.

The Smart Contract Fund holds several leading networks. It includes Solana at 28.58% and Ethereum at 28.41%. It also includes Hedera, Avalanche, and Sui.

The analyst stated that the shift comes during strong development inside the Cardano ecosystem. He pointed to fresh activity across core infrastructure. He also pointed to rising interest from developers.

Cardano, Grayscale, and Bitcoin DeFi Expansion

Humphries linked the allocation increase to Cardano’s ongoing move into Bitcoin-based DeFi. He said this direction could set it apart from other platforms. He added that this change could draw wider liquidity.

He explained that the network aims to bring Bitcoin holders into DeFi without giving up custody. He shared that non-custodial collateral models support this design. He also said stablecoin tools build further activity.

The analyst said this model could give Cardano an edge in a space led by Ethereum and Solana. He added that even moderate engagement could drive higher volumes. He also said this approach could shift user attention.

He noted that institutions continue to explore new blockchain exposure. He said Bitcoin-driven flows may support ADA’s appeal. He added that ADA could gain stronger visibility as this trend expands.

Humphries said many traders often watch Solana and Ethereum. He added that this sometimes causes ADA to be overlooked. He also said the new strategy may improve Cardano’s position.

Bitcoin DeFi Progress on Cardano

Cardano advanced its Bitcoin DeFi work through several public demonstrations. Developers carried out a live swap of Bitcoin for Minswap tokens at a major industry event. The event took place during the Bitcoin 2025 gathering.

Input Output Global later launched Cardinal. The protocol lets users bridge and stake BTC within Cardano’s extended UTXO framework. It also builds new paths for cross-chain activity.

Cardinal introduced fresh options for BTC holders. It lets them stay within a non-custodial environment. It also supports wider DeFi participation.

Development teams continue to expand these tools. They aim to unlock new liquidity routes. They also plan to broaden interaction across networks.

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