Canary Capital, a fledging crypto investment firm launched in the US filed an S-1 registration with the US SEC in October 2024 for a spot Litecoin ETF. As more and more ETFs get incepted into the markets, there is a high chance that the ETF will get approved, especially considering the price movement of LTC and the Proof of Work method it employs, making it the first ever Litecoin backed ETF in the world. This could also make it the first altcoin ETF approved following the reign of Donald Trump.

This article will explore the upcoming Litecoin ETF, Canara Capital’s reliability as an ETF company, and the potential inflows and competition it may face following its inception into the market.

Litecoin ETF: A Brief Overview

A Litecoin ETF is an exchange-traded fund that functions as an investment pool allowing investors and traders to invest in Litecoin without owning it directly. In this scheme, the ETF purchases LTC from various exchanges or through P2P trading. After successfully acquiring these coins, they are stored by a third party or the underlying company to ensure its security. Sometimes, these third parties can either be a person or an organization.

The ETF allows investors and traders to invest in their pool rather than resorting to crypto trading directly, which could sometimes result in a hassle. By doing this, you can greatly mitigate the risks up to some point. However, the main highlight of these ETFs is they allow mainstream investors and traders to immerse themselves in crypto trading, thereby increasing the market adoption and demand of the famed crypto.

Canary Capital Litecoin ETF

Canary Capital started pushing for the Litecoin ETF back in 2024. During the second week of October 2024, Canary Capital applied for a spot LTC ETF approval. And now, with Nasdaq submitting a 19b-4 form, which is crucial for issuing the spot ETF, to the US Securities and Exchange Commission (SEC), it is expected that the much-awaited LTC ETF will happen sooner than later.

The current Litecoin ETF was proposed by Canary Capital seeing the success of Bitcoin and Ethereum ETFs that were approved last year. They aim to add another community-backed project to the ever-evolving crypto investment criteria. It should also be noted that Canary Capital has amended its S-1 filing before the Nasdaq submission with the SEC providing a detailed response, indicating an interest on SEC’s part.

Market Reaction & Investor Sentiment

The news of the Litecoin ETF had a huge impact on the price movement of Litecoin. The coin, which was trading at $116 on the 16th shot up to a high of $140.07 in 24 hours. The coin is currently on a pullback following this rally, with its market value being $115.9. During this time frame during the run, many whales have reportedly accumulated significant amounts of Litecoins in their wallets. 

Litecoin’s market capitalization now stands at $8.71 billion with a total of 8 million wallets holding the LTC. Out of these 8 million holders, the top two wallets hold 5 and 2 million each, meaning their activities could significantly influence the price of the coin in the future. Based on this market data and investor sentiment, various market experts claim that the LTC will surge over 150% and reach a potential high of $280 by the end of April 2025. 

Projected Inflows & Competition

Various industry experts are predicting that a Litecoin ETF on approval could attract significant inflows to it. It is also estimated that this ETF will see a similar adoption rate to the ETF of the original crypto. As per this, the LTC ETF has the potential to attract about $250 to $500 million in its first year itself, making it the next big thing in the crypto industry in 2025.

However, the Litecoin ETF could face significant competition in the market, especially from XRP and Solana ETFs, which could potentially garner inflows in billions due to their current standing in the market. However, the final say in these inflows will go to the regulatory environment in the crypto industry.

How Reliable Is The Canary Capital?

The Canary Capital is a relative newcomer to the crypto ETF market, which means it may face several challenges in the upcoming days. The firm’s future in the ETF is heavily reliant on how it will navigate to overcome these challenges. Filing for the Litecoin ETF was the first step it took to immerse themselves into the ETF world, meaning they don’t have any previous track record of managing large-scale crypto assets.

If the company had prior experience, it could have helped in boosting its credibility and standing in the ETF market. However, that’s not the case. Also, many potential investors could consider this a drawback. Even with this, the Canary Capitals is still one of the most prominent investment firms out there and can be considered reliable regarding the LTC ETF scheme to some point.

Final Remarks

The move made by the Canary Capital for a Litecoin ETF is an exciting development in the crypto world. It has the potential to open new doorways, allowing retail investors to partake in various crypto trading. It could also result in the expansion of the crypto ETF ecosystem, which is currently focused on only Bitcoin and Ethereum. Regardless of the inflows to the ETF, the Litecoin ETF will likely bring brand new changes to the crypto ecosystem. As of now, we can only wait and see what awaits the world’s first Litecoin ETF. For further updates regarding the matter, stay tuned.