Why Litecoin could be the next cryptocurrency to get ETF approval

Author: Tom Carreras, CoinDesk; Compiler: Deng Tong, Golden Finance

summary

• Bloomberg ETF analysts said the U.S. Securities and Exchange Commission may be preparing a Litecoin ETF application.

• If so, they predict Litecoin is the cryptocurrency most likely to get its own ETF.

• However, incoming SEC leadership could change that.

With just four days left until US President-elect Donald Trump takes office, the US Securities and Exchange Commission (SEC) is also set to receive new leadership, and more cryptocurrencies may soon join Bitcoin (BTC) and Ethereum (ETH) Jump on the bandwagon and get your own spot exchange-traded fund (ETF).

Two ETF analysts at Bloomberg Intelligence, Eric Balchunas and James Seyffart, said that Litecoin (LTC) is likely to be the first to receive approval.

“Canary Funds has just submitted an amended S-1 filing for its Litecoin ETF application. While there is no guarantee, this may indicate that the SEC is participating in the application,” Seyffart posted on X.

“We heard that the Litecoin S-1 filing has received a response from the SEC,” Balchunas wrote, adding that the revised filing “foreshadows our prediction that Litecoin is most likely to be the next approved cryptocurrency. "

Additionally, Nasdaq filed a Form 19b-4 for Canary Funds’ Litecoin ETF on Thursday, meaning the SEC will now be forced to approve or reject the ETF in the coming year. LTC has gained 18% in the past 24 hours.

Why Litecoin? Litecoin has a market capitalization of $8.8 billion and is the 11th largest cryptocurrency in the CoinDesk 20 (an index of the top 20 cryptocurrencies excluding stablecoins, meme coins and exchange coins) and 24th overall.

But Litecoin is a fork of Bitcoin, which means its protocol follows the same basic rules as Bitcoin; for example, it uses a proof-of-work consensus mechanism. Importantly, contrary to larger cryptocurrencies such as Solana (SOL) and Ripple (XRP), the SEC has never called Litecoin a security.

“We expect a wave of cryptocurrency ETFs to emerge next year, although not all at once,” Balchunas wrote in December. “The first thing that comes out is probably the Bitcoin and Ethereum combo ETF, then it’s probably Litecoin (because it’s a fork of Bitcoin = a commodity), then HBAR (because it’s not labeled as a security), then XRP/Solana ( tagged as securities in pending litigation).”

However, the SEC under Paul Atkins may treat the crypto industry differently than it did under Gary Gensler, which Balchunas noted is a “huge variable.” ".