Grayscale Increases Bet on Cardano Amid Network’s Bitcoin DeFi Strategy, Expert Reacts

Analyst Zach Humphries recently highlighted Grayscale’s latest move on Cardano, noting that the asset manager increased its ADA allocation in its Smart Contract Fund. 

Humphries suggested that many investors may be underestimating ADA’s long-term growth potential as they exit the market amid recent price volatility. However, he argued that current conditions instead present an opportunity to accumulate, citing significant developments underway within the Cardano ecosystem. 

Key Points 

• Grayscale Investments increased Cardano’s allocation in its Smart Contract Fund from 19.50% to 20.07%.
• Crypto commentator Zach Humphries linked the increase to Cardano’s accelerating expansion into Bitcoin-based DeFi.
• He argues that Cardano’s Bitcoin DeFi strategy could differentiate it in a smart contract market dominated by Ethereum and Solana.
• Humphries expects Bitcoin-driven liquidity inflows to strengthen ADA’s appeal among institutions seeking diversified blockchain exposure.

Grayscale Increases ADA’s Allocation In Its Smart Contract Fund 

Notably, Humphries pointed to Grayscale’s latest portfolio adjustment, which raised Cardano’s allocation in its Smart Contract Fund from 19.50% to 19.55%. 

While the increase appears modest, Cardano proponents view it as a meaningful signal of institutional confidence. Notably, ADA’s weighting has since climbed further to 20.07% at press time, reinforcing Humphries’ suggestion that Grayscale is steadily increasing its exposure to Cardano. 

For context, the fund holds a diversified mix of major smart contract projects, including Solana (28.58%), Ethereum (28.41%), Cardano (20.07%), Hedera (8.40%), Avalanche (7.67%), and Sui (6.87%). 

Cardano’s Bitcoin DeFi Push Could Strengthen Its Competitive Edge 

Meanwhile, Humphries noted that the allocation increase coincides with Cardano’s accelerating push into Bitcoin-based decentralized finance. Notably, the network aims to unlock Bitcoin liquidity using non-custodial collateral models and stablecoin-driven credit systems to enable Bitcoin holders to access DeFi services within the Cardano ecosystem without relinquishing custody of their assets.

According to Humphries, this strategy could give Cardano a distinct advantage in an increasingly crowded smart contract market dominated by Ethereum and Solana. He argued that Bitcoin DeFi could become Cardano’s defining narrative, as even limited adoption could channel substantial liquidity into its ecosystem.

In turn, this influx could enhance ADA’s appeal to institutional investors seeking exposure beyond traditional smart contract platforms. 

Institutional and Retail Interest Could Accelerate

Furthermore, Humphries noted that while investors often concentrate on Solana and Ethereum, many currently overlook Cardano. However, he believes that positioning Cardano as the primary smart contract layer for Bitcoin DeFi could significantly boost ADA’s adoption as it taps into Bitcoin’s massive global user base. 

If successful, he believes this approach could attract substantial capital inflows and expand Cardano’s relevance.

Notably, Cardano has continued to advance its ambition to become the top smart contract platform for Bitcoin DeFi. Last year, its primary development arm, Input Output Global, debuted a live Bitcoin DeFi demonstration at the Bitcoin 2025 Conference in Las Vegas, where developers successfully executed an on-chain swap of Bitcoin for Cardano-based Minswap tokens. 

Building on that milestone, IOG later launched Cardinal, Cardano’s first Bitcoin DeFi protocol. The product enables users to bridge and stake BTC directly within the network’s extended UTXO model, further strengthening Cardano’s role in cross-chain decentralized finance.