Litecoin Spot ETF Timing: Will the SEC Approve an LTC Fund?

• Canary Capital applied for a Litecoin ETF.
• The SEC now has 240 days to respond.
• Some financial instruments already allow investments in LTC.

Asset manager Canary Capital has entered the cryptocurrency exchange-traded funds (ETFs) market by filing a registration application with U.S. regulators for a spot Litecoin (LTC) ETF.

This move is part of a broader trend of increased interest in alternative cryptocurrency ETFs, particularly as the U.S. presidential election approaches.

Canary Files Litecoin ETF S-1

Canary’s proposed Litecoin ETF aims to track the performance of LTC, a decentralized digital currency often viewed as a faster and more affordable alternative to Bitcoin for smaller transactions.

The filing comes shortly after Canary submitted a similar application for a Ripple (XRP) ETF .

Litecoin (LTC) price chart. Source: CoinMarketCap

After the news, Litecoin (LTC) experienced a significant rally, with its trading volume surging by 150% in the past 24 hours.

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This surge in buying pressure has propelled the coin to its highest price point in two and a half months.

It is currently trading at $70.70, reflecting a 5.5% increase in the last day.

SEC Has Eight Months To Respond

The Securities and Exchange Commission (SEC) has a maximum of 240 days to respond to an S-1 filing for an ETF.

This means the commission has until June 2025 to decide whether to approve or reject Canary Capital’s proposed Litecoin ETF.

If the SEC approves the ETF, it would be a significant milestone for the cryptocurrency industry.

It would provide investors with a regulated and convenient way to gain exposure to Litecoin, the 21st cryptocurrency, by market capitalization as of Oct. 16, 2024.

Canary Capital LTC ETF S-1. Source: SEC

However, the SEC has been known to take a cautious approach to regulating cryptocurrencies.

Furthermore, the SEC’s decision to approve the Litecoin ETF will depend on assessing the risks and benefits associated with such a product.

However, unlike Ripple, Solana (SOL), and other potential ETF candidates, Litecoin has maintained a clearer regulatory record, which could play in its favor.

Litecoin positions itself as a faster alternative to Bitcoin, which the SEC has confirmed is not a security.

Additionally, the upcoming U.S. elections could impact the SEC’s decision regardless of its outcome.

Litecoin Available Instruments

While a Litecoin ETF has yet to launch, investors can still access various financial instruments based on LTC.

These include Litecoin trusts, exchange-traded products (ETPs), and derivatives like futures contracts. They all allow exposure to the cryptocurrency without directly purchasing and holding it.

One notable example is the Grayscale Litecoin Trust , which offers investors a way to gain exposure to LTC without the complexities of direct ownership. The trust’s shares track the price of LTC, providing investors with a proportionate stake in the cryptocurrency’s value.

Grayscale’s Litecoin Trust launched on March 1, 2018, and began trading on the OTC market on Aug. 18, 2020. It has a management fee of 2.50% and no performance fees or distribution frequencies.

Additionally, some crypto-focused investment funds include LTC in their portfolios, offering another avenue for those seeking indirect exposure.

These options enable investors to participate in Litecoin’s market movements while awaiting the potential approval of a dedicated ETF.