Following the success of spot Bitcoin ETFs and Ethereum ETFs in the market, Litecoin (LTC) is emerging as a frontrunner in the race to secure its own exchange-traded fund (ETF). Recent developments suggest that Litecoin could be the next major cryptocurrency to gain ETF approval, potentially attracting significant institutional investment and boosting its market position.
Quick Take
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Canary Capital has submitted an amended S-1 form and Nasdaq has filed a 19b-4 form for Litecoin’s ETF, indicating strong momentum towards SEC approval.
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The transition of SEC leadership from Gary Gensler to Paul Atkins, a more crypto-friendly chair, is expected to enhance the likelihood of Litecoin’s ETF being approved.
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Litecoin surged over 11% following the ETF filing announcement, highlighting robust investor optimism and increased market interest.
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Analysts project that the Litecoin ETF could attract up to $580 million in inflows, positioning LTC as a key contender in the expanding crypto ETF landscape.
Amended Litecoin ETF Filings Signal Progress
Canary Capital, a prominent digital asset-focused investment firm, has recently filed an amended S-1 form for its proposed Litecoin ETF. According to Bloomberg ETF analysts Eric Balchunas and James Seyffart, this amendment is a positive indicator that the U.S. Securities and Exchange Commission (SEC) is actively engaging with the filing. Seyffart highlighted on X (formerly Twitter) that the amended filing "might be indicative of SEC engagement," while Balchunas added that it "bodes well for our prediction that Litecoin is most likely to be the next coin approved."
Source: X
Further cementing Litecoin's position, Nasdaq filed a 19b-4 form on January 16, 2025, to list and trade Canary Capital's Litecoin ETF. This filing compels the SEC to either approve or reject the ETF within the coming year. Following this news, Litecoin experienced an impressive 18% surge in price over the last 24 hours, reflecting strong market optimism.
Litecoin ETF vs. XRP and Solana ETFs
Litecoin boasts a market capitalization of $8.8 billion, ranking it as the 11th largest cryptocurrency in the CoinDesk 20 index and the 24th largest overall. Unlike some of its larger counterparts, Litecoin is a Bitcoin fork, meaning it shares Bitcoin’s fundamental protocol but with enhancements such as faster transaction times and lower fees. Importantly, the SEC has not classified Litecoin as a security, unlike other major cryptocurrencies like Solana and XRP. This classification significantly enhances Litecoin’s chances of ETF approval, as the SEC has been cautious about approving ETFs for assets it deems securities.
Source: X
Balchunas and Seyffart from Bloomberg Intelligence predict that Litecoin could attract up to $580 million in ETF inflows if investor adoption mirrors that of Bitcoin ETFs. Currently, about 6% of Bitcoin’s supply is held in ETFs, and a similar adoption rate for Litecoin could translate into substantial investment.
Can a Litecoin ETF Get Approval Under New SEC Leadership?
A pivotal factor influencing Litecoin's ETF prospects is the impending leadership change at the SEC. Gary Gensler, known for his stringent regulatory stance on cryptocurrencies, is stepping down as SEC Chair on January 20, 2025. Paul Atkins, a former SEC commissioner with a reputation for being more crypto-friendly, is set to take the helm. Analysts believe that Atkins’ appointment could herald a more balanced regulatory approach, potentially accelerating the approval of crypto ETFs.
Under Gensler, the SEC had pursued over 80 actions against crypto firms, often categorizing various tokens as unregistered securities. This aggressive regulatory environment created significant uncertainty within the crypto market. In contrast, Atkins is expected to collaborate with other Republican SEC commissioners like Hester Peirce and Mark Uyeda, who have been vocal critics of Gensler’s policies. This shift could lead to a more favorable environment for Litecoin and other cryptocurrencies seeking ETF approval.
How High Can LTC Price Go If a Litecoin ETF Gets Approved?
Litecoin price chart | Source: X
The market has responded positively to Litecoin’s ETF developments. As of January 16, 2025, Litecoin's price surged by nearly 24% in a single day, reaching $129.49 and marking it as one of the top gainers among the top 100 cryptocurrencies by market cap. On-chain analytics firm Santiment attributes this rally to "whales"—large investors holding significant amounts of LTC—who have recently increased their holdings.
Looking ahead, Balchunas anticipates a wave of ETF approvals throughout 2025, starting with Bitcoin and Ethereum, followed by Litecoin and Hedera (HBAR). Solana ETFs and XRP ETFs are also in the mix, though their approval prospects may be hindered by ongoing SEC lawsuits labeling them as securities.
Helene Braun from CoinDesk highlights that if Litecoin’s ETF is approved, it could attract up to $580 million in inflows, positioning Litecoin as a strong contender alongside Bitcoin and Ethereum in the institutional investment space. While this figure is modest compared to the billions garnered by Bitcoin ETFs, it remains significant within the broader ETF market, where only about 1,330 out of 4,000 U.S.-based ETFs manage assets over $300 million.
Read more: How to Mine Litecoins: The Ultimate Guide to Litecoin Mining
Conclusion
Litecoin's journey from a top-ten cryptocurrency to its current standing has been marked by resilience and strategic positioning. The potential approval of a Litecoin ETF could reignite its status as a major player in the crypto market, attracting both institutional and retail investors seeking diversified exposure to digital assets.
As the SEC transitions to new leadership under Paul Atkins, the regulatory environment for cryptocurrencies is poised for transformation. This shift, combined with Litecoin’s robust fundamentals and favorable regulatory classification, makes 2025 a pivotal year for Litecoin’s ascent in the crypto ETF arena.
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