Asset management company Canary Capital has filed for S-1 registration for its Litecoin ETF product. The company, founded by Stephen McClurg, has filed a Canary Litecoin ETF product with the U.S. Securities and Exchange Commission (SEC).
This application focuses on providing exposure to the value of LTC held by the Trust. This comes less than a week after the asset manager took a similar bold step with its XRP ETF application.
Canary Capital praises Litecoin’s role in crypto ecosystem
According to Canary Capital, the decision to select LTC came from understanding the leading role of altcoins in the cryptocurrency ecosystem.
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Litecoin’s key characteristics make it attractive to many institutional investors. Investing in Litecoin offers a unique experience in a time-tested and reliable cryptocurrency.
“As one of the longest-running blockchains with 100% uptime since its inception, Litecoin has a proven track record of security and reliability in critical enterprise-grade use cases.” the asset management company wrote in a filing.
In addition to this move from Canary Capital, CoinShares operates a Litecoin-based exchange traded product in Switzerland. Grayscale Investments received approval from the Financial Industry Regulatory Authority (FINRA) to offer a dedicated Litecoin trust four years ago.
These are some of the few Litecoin products in the global ETF market.
Will the US SEC approve a Litecoin ETF? Impact on price
James Seifert, senior ETF analyst at Bloomberg, argues that Litecoin and Bitcoin have similar regulatory concerns. He pointed out that the premise is that Litecoin, which is a fork of Bitcoin, will be counted as a commodity.
In January 2024, approximately 11 spot Bitcoin ETF applications from BlackRock, Bitwise, and Fidelity received SEC approval.
In the case of Litecoin, “Approving an ETF under the current administration would require a large, liquid, federally regulated futures market in the United States. Litecoin does not currently meet that requirement.” Mr. Seifert opined.
However, he believes the election of a pro-crypto president in the US will have an impact on applications. For context, any change in SEC leadership will depend on the outcome of the upcoming 2024 U.S. presidential election.
“We will need to see a 19b-4 filing before the SEC action begins,” he added.
If approved by the SEC, LTC prices could record significant increases. With institutional support, a gradual rise towards all-time highs (ATHs) is possible over the long term. The coin is trading at $69.30, representing an increase of 3.51% in the past 24 hours.
US Crypto ETF Solana, XRP and now Litecoin
After Bitwise filed its first spot XRP ETF application a few days ago, Canary Capital followed suit.
These crypto ETF trends highlight the growing interest among institutional investors in digital assets beyond Bitcoin and Ethereum. When the Bitcoin Spot ETF launched earlier this year, several analysts predicted that other crypto ETFs would follow suit.
So far, VanEck and 21Shares have each submitted Solana ETF applications. Although the 19b-4 filing was later removed from Cboe’s website, the move remains promising.
Ripple CEO Brad Garlinghouse expects more XRP ETF applications to appear on the SEC’s desk soon. Moreover, asset managers may look in the direction of cryptocurrencies other than XRP, Solana, and Litecoin.
