The U.S. Securities and Exchange Commission’s (SEC) recent framework to expedite altcoin ETF approvals has boosted expectations that Cardano’s (ADA) ETF could launch before the end of 2025. However, emerging concerns over a potential government shutdown suggest that this timeline may be overly optimistic, with delays potentially pushing approval into 2026.
In September, the SEC eliminated the cumbersome 19b-4 filing process and introduced a “generic listing standards” mechanism designed to fast-track altcoin ETF approvals. This restructuring was widely viewed as a positive signal, and market participants, such as those on Polymarket, currently place roughly a 90% probability on the ADA ETF receiving approval by the close of 2025.
Despite this confidence, the looming chance of a government shutdown complicates the picture. Data indicates there is about a 36% probability of a month-long federal government shutdown in the near term. Such a scenario would significantly hinder the SEC’s ability to review and approve new ETF filings, including those for cryptocurrency products like Cardano.
According to the SEC’s contingency plans during a shutdown, only a small fraction—approximately 390 out of 4,200 employees—remain active. These staff members are tasked primarily with emergency responses and ongoing market surveillance, rather than processing new filings.
The EDGAR system will remain open for ETF issuers to submit applications, yet no agency personnel will be available to assess, comment on, or accelerate these filings. With ongoing IPO reviews already on hold, a shutdown would exacerbate the existing backlog, directly impacting the pending wave of altcoin ETFs.
Market expectations, reflected in government shutdown-related contract data on Polymarket, anticipate federal operations resuming around late October or early November, with consensus clustering near October 30. If this timeline holds, the SEC would face roughly three weeks without most staff to review filings.
Even if government functions resume by that date, the remaining timeframe before the year-end holiday period—and with Thanksgiving further limiting workdays—offers minimal opportunity to clear backlogs. Extended shutdown probabilities are also notable, with about a 31% chance assessed by traders that the closure could stretch into November. This length would rival the 35-day shutdown record from 2018-2019.
Such an extended halt could delay numerous processes beyond ETF approvals, including IPO reviews and enforcement actions, further straining the SEC’s workflows and slowing progress on all fronts.
While there remains a genuine prospect that the ADA ETF could be approved by year-end 2025—potentially ranking high on the agency’s priority list—the current market optimism may underestimate the operational risks posed by political deadlock. The roughly 11% market-implied chance that Cardano’s ETF application is not approved in 2025 could thus be lower than the actual probability of delay.
In summary, the SEC’s new fast-tracking approach certainly improves the prospects for altcoin ETFs, but external factors like a government shutdown introduce significant uncertainty. Investors and market watchers should be mindful of the possibility that Cardano’s ETF approval may not materialize until sometime in 2026.
