Litecoin ETF Filing Sparks New Contender in Crypto ETF Race

Litecoin has joined the race for crypto exchange-traded funds (ETFs) in the U.S., following a recent filing by Canary Capital. The amended S-1 form, filed on January 16, signals that the issuer is actively addressing regulatory concerns and suggests ongoing discussions with the Securities and Exchange Commission (SEC).

What the Filing Means for Litecoin ETF Approval

While the amended S-1 filing is a positive step, it’s essential to note that it doesn’t guarantee approval. The most crucial step – the 19b-4 filing – is still missing, which means the official clock for SEC approval or denial hasn’t started yet.

“This bodes well for our prediction that Litecoin is most likely to be the next coin approved,” said Bloomberg ETF analyst Eric Balchunas.

Litecoin’s ETF Potential and Market Impact

If approved, Litecoin’s ETF could become the third-spot crypto ETF in the U.S., following Bitcoin and Ethereum. The market seems to be responding to these whispers, with LTC’s price jumping over 16% in the last 24 hours, reaching $117.92, making it the fourth-largest gainer among the top 100 cryptos by market cap.

According to on-chain analytics firm Santiment, this rally is fueled by “whales” – large investors holding at least 10,000 LTC – who have added 250,000 coins since January 9.

Solana and XRP Lead the Way in Crypto ETF Race

The race for crypto ETFs in the U.S. is heating up, with Solana and XRP leading the way. At least five major firms – VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital – have filed 19b-4 forms for spot Solana ETFs, moving these applications into formal SEC review.

Meanwhile, the race for a spot in Ripple XRP ETF is also picking up speed, with four firms – WisdomTree, Bitwise, 21Shares, and Canary Capital – submitting applications.

SEC Approval and Potential Inflows

The stakes are high, with banking giant JPMorgan estimating that the Solana and XRP ETFs alone could pull in up to $14 billion in their first year. For Solana specifically, projections suggest an inflow of $3 billion to $6 billion, while XRP could potentially attract $4 billion to $8 billion.

“JPMorgan is saying that alt-coin ETF will collect $14b in flows in first year, $3-6b for Solana and $4-8b for XRP. My team hasn’t made any formal predictions yet but this seems like a pretty reasonable guess,” said Eric Balchunas.

Gensler Out, Atkins In: What This Means for Crypto ETFs

The crypto industry is on the cusp of a profound regulatory makeover as leadership in the SEC prepares for a complete overhaul. Outgoing SEC Chair Gary Gensler will step down on January 20, and Donald Trump’s pick for chair, Paul Atkins, is widely regarded as a crypto-friendly figure.

Atkins’ approach is expected to stand in stark contrast to Gensler’s enforcement-heavy tenure, during which the SEC pursued over 80 actions against crypto firms. The incoming leadership appears poised to take a more balanced approach, collaborating closely with Republican SEC commissioners Hester Peirce and Mark Uyeda.

Tips for Investors

  • Keep an eye on the SEC’s decisions regarding Litecoin, Solana, and XRP ETFs, as these could have a significant impact on the market.
  • Consider the potential inflows into crypto ETFs, with estimates suggesting up to $14 billion in the first year for Solana and XRP ETFs.
  • Monitor the regulatory landscape, as the new SEC leadership under Paul Atkins is expected to take a more balanced approach to crypto regulation.

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