Why is Cardano’s share rising in Grayscale’s fund? Explained!

While many retail investors are panicking about Cardano, one of the world’s largest digital asset managers is quietly doing the opposite. ADA’s price has fallen more than 22% in the past month and is struggling to stay above $0.27.

Despite the bearish mood, Grayscale has increased Cardano’s share in its Smart Contract Fund again, raising it to 20.34%. This shows that while small investors are selling, large institutions are adding more exposure.

This is not a small adjustment. It is a repeated increase that confirms Cardano’s position as the third most important asset in the fund, after Solana [SOL] and Ethereum.

This shows that Grayscale is taking a long-term approach to Cardano [ADA], while most retail investors focus on short-term price moves. Since January 2026, ADA’s share in its Smart Contract Fund has slowly risen from about 18.5% to over 20%.

Because the fund follows fixed rules, Grayscale must buy more ADA during rebalancing. 

Interestingly, this is happening at a time when Bitcoin [BTC] and Ethereum [ETH] are gaining strong institutional traction, and now Cardano has also joined the fray.

Cardano’s metrics are concerning

Technical indicators are suggesting the market may be near exhaustion. Cardano’s MVRV Ratio has dropped sharply, meaning most holders are now in a loss.

In the past, when the 30-day MVRV fell below -20%, weak investors usually sold their holdings, leaving mostly long-term holders in the market. This pattern often appeared near market bottoms.

At the same time, Open Interest has dropped, showing that many short-term traders and speculators have exited.

When both price and Open Interest fall together, they usually signal that the market is clearing out excess hype.

This often happens near the end of a downtrend, when selling pressure starts to fade, and the market prepares for a possible recovery.

What lies ahead for Cardano?

All in all, Cardano is stuck between two opposite stories. On one side, its price is weak, and retail investors are worried.

On the other side, Cardano is going through major technical upgrades, with the next 45 days expected to bring its biggest changes since the Alonzo era.

At the same time, the Midnight privacy chain is set to launch by the end of March, offering selective privacy for regulated use, with support from Google and Telegram.

Thus, while the market is focused on fear and falling prices, big investors are betting on long-term infrastructure, suggesting Cardano’s quiet phase may soon end.

Final Summary

• ADA’s rising share in the fund proves that institutions see it as a core asset, not a short-term trade.
• Falling MVRV and Open Interest suggest weak hands have exited, which often happens near market bottoms.