US Ethereum ETF net flows. Source: Glassnode
This indicates that initial excitement may have been overstated and actual institutional demand after launch was lower than expected.
If Ethereum, the second-largest cryptocurrency with a strong ecosystem of decentralized applications and smart contracts, fails to sustain its post-ETF rally, Litecoin, an asset with less institutional interest and a narrow use case, may face a similar, if not more, situation. ,assignment.
Historically, Litecoin has struggled to gain institutional attention over the long term, and there is little evidence that small-capitalization ETF filings will change the situation.
Greyscale Omens: New Headwinds
Another key element is the existing Grayscale Litecoin Trust (LTCN). It works similarly to an ETF, but with some important differences in liquidity and structure.
Grayscale also operates the Ethereum Trust, which was later converted into an ETF under the ticker “ETHE.”
ETHE, highlighted in gray in the chart below, has contributed the most to outflows from the Ethereum ETF since launch. The main reason for this is high fees, with investors choosing to either move money out of the ETF or close out their positions entirely.
