- Canary Capital has filed for a spot Litecoin ETF.
- The ETF goals to supply institutional traders publicity to Litecoin’s worth.
- Regulatory challenges might come up, particularly relating to market infrastructure and liquidity.
Canary Capital, a notable identify on this planet of cryptocurrency funding, has filed for a spot Litecoin exchange-traded fund (ETF) with the US Securities and Change Fee (SEC).
This latest submitting comes simply days after the corporate submitted an analogous registration for a spot XRP ETF.
The newest filings sign the agency’s formidable enlargement plans within the digital asset funding panorama, concentrating on institutional traders in search of dependable cryptocurrency publicity.
Aiming to faucet into the potential of Litecoin (LTC)
The newly filed S-1 registration assertion outlines Canary Capital’s goal to supply traders with publicity to the worth of Litecoin (LTC) held by the belief.
In accordance with the submitting, the ETF will monitor the value actions of Litecoin, though specifics concerning the custodian or administrator for the fund weren’t disclosed.
Canary Capital goals to place Litecoin as a compelling selection for institutional traders searching for publicity to a “time-tested and dependable cryptocurrency.”
In an announcement, the agency emphasised Litecoin’s distinguished position within the broader cryptocurrency ecosystem. The digital foreign money is acknowledged as one of many longest-running blockchains, boasting 100% uptime since its inception in 2011.
This spectacular monitor report of safety and reliability, together with vital enterprise use circumstances, has positioned Litecoin as a beautiful asset for potential traders.
Canary Capital’s transfer to file for a spot Litecoin ETF is predicated on the idea that the cryptocurrency’s resilience and long-standing historical past make it a novel and interesting funding choice.
Navigating regulatory hurdles
James Seyffart, an ETF analyst at Bloomberg, weighed in on the submitting, noting that whereas there are present exchange-traded merchandise that embody Litecoin, resembling these from CoinShares in Switzerland and a Grayscale belief within the US, gaining approval from the US SEC won’t be with out challenges.
Additionally there are some ETPs that already maintain Litecoin.$LITE in Switzerland from @CoinSharesCo $ELTC in Germany from @ETCGroupLLC (now owned by @BitwiseInvest )
We even have a @Grayscale belief right here within the US:$LTCN
— James Seyffart (@JSeyff) October 15, 2024
Nevertheless, Seyffart highlighted the chance that Litecoin might be handled equally to Bitcoin when it comes to regulatory classification. Since Litecoin originated as a fork of Bitcoin, it shares a few of Bitcoin’s decentralized and commodity-like traits.
The approval of Bitcoin ETFs earlier this yr set a possible precedent that would work in favour of Litecoin’s case, given their shared historical past and comparable traits.
Nevertheless, Seyffart cautioned that regardless of this similarity, Litecoin would nonetheless want to fulfill the SEC’s stringent necessities for market infrastructure and liquidity.
The present regulatory setting beneath the SEC requires a large and liquid futures market that’s federally regulated in the US, which Litecoin presently lacks. This absence of a regulated futures market may complicate the approval course of for the ETF, particularly beneath the present administration’s regulatory framework.
Nonetheless, the upcoming US presidential election may considerably affect the SEC’s stance on cryptocurrency ETFs. Former President Donald Trump, who has been considered as extra beneficial towards the cryptocurrency business, has beforehand expressed his intention to dismiss present SEC Chair Gary Gensler if he have been to return to the workplace.
Ought to there be a shift in management on the SEC, it may create a extra accommodating regulatory setting for cryptocurrency merchandise, together with the potential approval of spot crypto ETFs resembling these for Litecoin and XRP.
Seyffart identified that the submitting for a spot Litecoin ETF might be seen as a strategic transfer in anticipation of a possible change within the SEC’s management.
Nonetheless, a 19b-4 submitting, which might be submitted by exchanges on behalf of the issuer, remains to be required to begin the official approval course of. As soon as this doc is filed, it would set off a particular timeline for the SEC to assessment and reply to the ETF utility.
Canary Capital’s broader crypto ETF technique
Canary Capital’s choice to file for a spot Litecoin ETF comes shortly after its S-1 registration assertion filed on Tuesday for a spot XRP ETF, reflecting the agency’s broader technique to deliver a number of cryptocurrency ETFs to the market.
The corporate has expressed confidence within the progress potential of each Litecoin and XRP, that are acknowledged as vital gamers within the digital foreign money house. If permitted, these ETFs would offer institutional traders with new avenues for diversifying their portfolios by way of direct publicity to the respective cryptocurrencies.
The SEC has but to approve a spot XRP ETF, and the applying might face extra scrutiny because of the company’s ongoing authorized battle with Ripple Labs, the corporate behind XRP. The SEC has accused Ripple of conducting an unregistered securities providing price $1.3 billion, a authorized dispute that would complicate the approval course of for a spot XRP ETF.
