The U.S. Securities and Exchange Commission (SEC) has officially acknowledged Canary Capital's proposal for a spot Litecoin (LTC) exchange-traded fund (ETF).
The U.S. Securities and Exchange Commission (SEC) has officially acknowledged Canary Capital's proposal for a spot Litecoin (LTC) exchange-traded fund (ETF), marking a significant step toward potential approval. This move opens the door for public comments and signals that Litecoin could become the third cryptocurrency, after Bitcoin and Ethereum, to receive an ETF in the United States. Canary Capital filed its S-1 registration for the Litecoin ETF in October 2024, and Nasdaq submitted the required 19b-4 filing on Jan. 16, 2025.
Litecoin’s price has risen sharply in response to this progress. As of Jan. 29, 2025, the coin surged by over 15%, reaching around $118, before stabilizing near $117. Analysts suggest the price increase is driven by growing expectations that the Litecoin ETF could be approved. Eric Balchunas, a senior ETF analyst at Bloomberg, noted that this is the first altcoin ETF filing to be acknowledged by the SEC, and the closest to meeting regulatory requirements.
The proposed ETF aims to simplify cryptocurrency investments for traditional investors by eliminating the need to manage digital wallets and cryptographic keys. Instead, investors would gain exposure to Litecoin via their standard brokerage accounts. The ETF would track the CoinDesk Litecoin Price Index (LTX) and store Litecoin through a comprehensive custody framework.
This filing is part of a larger trend of exploring altcoin ETFs, with other filings, such as those for XRP and Solana (SOL), also on the SEC’s desk. However, Litecoin’s proposal seems to have gained more traction, with analysts predicting that the SEC could approve it more quickly than others due to ongoing regulatory challenges surrounding assets like XRP and Solana.
The SEC's current review process will include a public comment period and several review phases, which could take up to 240 days. The Commission will evaluate market risks, investor protections, and compliance with financial rules before making a final decision.
Litecoin’s surge in price coincides with the growing optimism surrounding the ETF proposal. The cryptocurrency’s market movement reflects the excitement about the possible approval of the ETF, which would offer investors a more accessible way to gain exposure to Litecoin without directly owning the asset.
The shift in the SEC’s stance on cryptocurrency investment products under Acting Chairman Mark Uyeda is also notable. Under the leadership of Gary Gensler, the SEC had been more cautious about crypto ETFs. However, with Uyeda’s appointment, and the involvement of pro-crypto Commissioner Hester Pierce, the SEC’s approach appears more open to approving altcoin ETFs, potentially signaling a new phase for cryptocurrency investment products in the United States.
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