Litecoin (LTC) is on the verge of becoming the third cryptocurrency to have spot exchange-traded funds (ETFs) in the United States. The U.S. Securities and Exchange Commission (SEC), often described as the country’s securities watchdogs, is currently evaluating the filings from digital asset management firms Canary Capital and Grayscale for a spot Litecoin ETF.
The Litecoin spot ETF provides investors with exposure to LTC through an investment fund traded on stock exchanges like the Nasdaq. Retail and institutional investors will soon be able to trade Litecoin shares on the traditional market without directly holding the cryptocurrency. The exchange-traded product (ETP) is still awaiting the SEC’s approval, which is expected in the coming months.
Before moving on to the details about Litecoin ETFs, we believe you should have a clear understanding of what Cryptocurrency ETFs are and how they function. Let us take a look at what these new-age investment products are and what to expect from the upcoming spot Litecoin ETF.
What Are Cryptocurrency ETFs?
Cryptocurrency exchange-traded funds (ETFs) allow investors to attain exposure to crypto assets without actually buying and storing them by themselves. The products typically track the price performance of a particular cryptocurrency or a collection of crypto assets by investing in a fund portfolio.
This investment strategy equips retail traders and institutional investors to be aware of the price of cryptocurrencies via the stock exchange and buy or sell shares in the ETFs without directly participating in the crypto market. Cryptocurrency ETFs eradicate the complexities associated with the direct ownership of digital assets.
The ProShares Bitcoin Strategy ETF was the first crypto exchange-traded fund launched in the United States, which started trading in October 2021. This futures ETF was the largest such product until the launch of Blackrock’s $50 billion iShares Bitcoin Trust (IBIT) ETF in January 2024.
The previous year, the SEC approved ETFs backed by two of the largest cryptocurrencies – Bitcoin (BTC) and Ethereum (ETH). The spot Bitcoin ETFs marked a historic debut in the ETF market’s 35-year history, attaining 800,000 BTC (approximately $68 billion) in net assets through 12 ETFs trading on Wall Street in less than a year.
Will Litecoin ETFs Be Similiar To Spot Bitcoin ETFs?
Spot Bitcoin ETFs are investment funds that track the price of BTC and trade the apex cryptocurrency on conventional stock exchanges instead of cryptocurrency exchanges. Bitcoin and Litecoin are closely associated, with the latter emerging as a fork of the former to address its scalability limitations and block creation time
With Litecoin ETFs expected to arrive on Wall Street this year, we believe that the products might share some similarities with their Bitcoin equivalents. Let us take a look at the features of the spot Bitcoin ETFs since they all could be almost similar to the spot Litecoin ETFs as well.
Convenience is the key advantage of Bitcoin ETFs that provide exposure to the market performance of BTC without making any fuss about the underlying technology of its blockchain. The product simplifies crypto investment by providing a regulated environment where investors can buy, sell, and trade shares of Bitcoin via their brokerage accounts.
Litecoin ETFs are likely to implement these conveniences in their services as well. Bitcoin ETFs enable users to invest in the cryptocurrency. Comprehensive details of Litecoin ETFs are not available right now but we can expect these features from Litecoin ETFs.
- Easier and direct access to Litecoin (LTC) markets
- Low fees structure
- Ability to track Litecoin’s price movements accurately
- Enhanced security and regulatory compliances
- Easier access for traditional investors through the stock exchange
The listed features are not confirmed, we can only know them once the products are officially launched.d.
What To Expect From Spot Litecoin ETFs?
Digital asset managers and ETF issuers Canary Capital and Grayscale are waiting for the Securities and Exchange Commission’s approval to launch their respective spot Litecoin ETFs. Nasdaq has already filed a 19b-4 form on behalf of Canary Capital to gain approval for the Canary Litecoin ETF. The company has already amended its regulatory form for the ETF and is expected to get the green light from the new SEC leadership under the Trump administration that is ready to take charge.
James Seyffart, Bloomberg’s ETF expert, stated that the 19b-4 filing from Nasdaq is in the process with the SEC, but the securities regulator still has to acknowledge the filing, which typically takes weeks or months. He mentioned that if or when the SEC acknowledges this filing, they would have a more definitive idea of the timelines for a potential denial or approval of the Litecoin ETFs.
Grayscale Litecoin Trust (LTCN) is another investment product that was created to equip traders with the price movement of Litecoin (LTC)
The potential release date of Litecoin ETFs is not confirmed yet, but we can anticipate it to occur before the end of the year. The latest reports suggest that The Securities and Exchange Commission (SEC) has 45 days to make an initial decision regarding Litecoin ETFs and 240 days to respond to the Canary’s application and make a final decision with a deadline of June 2025. Trump’s appointment of crypto advocate and former SEC commissioner Paul Atkins as the agency’s chairman is expected to incite the process
The Bottom Line
The official release date of the spot Litecoin ETF has not been announced yet, it is guaranteed to be introduced this year, with asset managers predicting the value of the crypto asset. The launch of Litecoin ETFs will depend on getting approval from the SEC, the experts are optimistic about the chances of getting the approval since the regulator’s leadership is not anti-crypto for the first time in the history of the American economy. The Litecoin ETFs are generally expected to share similar features and functionalities of Bitcoin ETFs. The investment fund tracking the price of the 19th largest cryptocurrency by market capitalization will most likely begin trading on Wall Street by June 2025.
