- Canary Capital has filed for a Litecoin spot ETF.
- The ETF goals to supply institutional traders with publicity to the worth of Litecoin.
- Regulatory challenges might come up, notably concerning market infrastructure and liquidity.
Canary Capital, a notable identify on the earth of cryptocurrency investing, has filed for a Litecoin spot exchange-traded fund (ETF) with the US Securities and Change Fee (SEC).
This latest submitting comes simply days after the corporate submitted the same submitting for a spot XRP ETF.
The most recent filings sign the corporate's formidable growth plans into the digital asset funding panorama, focusing on institutional traders in search of dependable publicity to cryptocurrencies.
Aiming to harness the potential of Litecoin (LTC)
The just lately filed S-1 registration assertion describes Canary Capital's purpose of offering traders with publicity to the worth of Litecoin (LTC) held by the belief.
In keeping with the submitting, the ETF will observe the value actions of Litecoin, though particulars concerning the custodian or administrator of the fund weren’t disclosed.
Canary Capital goals to place Litecoin as a compelling selection for institutional traders searching for publicity to a “dependable and confirmed cryptocurrency.”
In a press release, the corporate highlighted Litecoin's main function within the broader cryptocurrency ecosystem. The digital forex is acknowledged as one of many oldest blockchains, with 100% availability since its inception in 2011.
This spectacular observe report of safety and reliability, together with important enterprise use instances, has positioned Litecoin as a gorgeous asset for potential traders.
Canary Capital's choice to file for a Spot Litecoin ETF relies on the assumption that the cryptocurrency's resilience and lengthy historical past make it a singular and engaging funding possibility.
Overcoming regulatory hurdles
James Seyffart, an ETF analyst at Bloomberg, weighed in on the matter, noting that whereas there are exchange-traded merchandise that embody Litecoin, resembling these from CoinShares in Switzerland and a Grayscale Belief in the US , they obtained approval from the US SEC. won’t be with out challenges.
Some ETPs additionally maintain Litecoin.$LITE in Switzerland from @CoinSharesCo $ELTC in Germany from @ETCGroupLLC (now owned by @BitwiseInvest )
We even have a @Grayscale belief right here in the US:$LTCN
–James Seyffart (@JSeyff) October 15, 2024
Nonetheless, Seyffart highlighted the chance that Litecoin could possibly be handled the identical as Bitcoin by way of regulatory classification. Since Litecoin is initially a fork of Bitcoin, it shares a few of the decentralized and commodity-like traits.
The approval of Bitcoin ETFs earlier this yr set a possible precedent that might work in Litecoin's case, given their shared historical past and comparable traits.
Nonetheless, Seyffart cautioned that regardless of this similarity, Litecoin would nonetheless have to fulfill the SEC's strict market infrastructure and liquidity necessities.
The present SEC regulatory atmosphere requires a big and liquid, federally regulated futures market in the US, which Litecoin at the moment lacks. This lack of a regulated futures market might complicate the ETF approval course of, notably beneath the present administration's regulatory framework.
Nonetheless, the upcoming US presidential election might considerably affect the SEC's stance on cryptocurrency ETFs. Former President Donald Trump, who has been seen as extra supportive of the cryptocurrency trade, has already expressed his intention to fireside present SEC Chairman Gary Gensler if he have been to return to workplace.
If there was a change in management throughout the SEC, it might create a extra accommodating regulatory atmosphere for cryptocurrency merchandise, together with the potential approval of spot cryptocurrency ETFs resembling these for Litecoin and XRP.
Seyffart emphasised that submitting for a spot Litecoin ETF could possibly be seen as a strategic transfer in anticipation of a possible change in SEC management.
Nonetheless, a 19b-4 submitting, which might be submitted by the exchanges on behalf of the issuer, continues to be required to provoke the formal approval course of. As soon as this doc is filed, it’s going to set off a particular timeline for the SEC to evaluation and reply to the ETF utility.
Canary Capital's Broader Crypto ETF Technique
Canary Capital's choice to file for Spot Litecoin ETF comes shortly after its S-1 registration assertion filed for a spot XRP ETF on Tuesday, reflecting the corporate's broader technique to convey a number of cryptocurrency ETFs to market.
The corporate expressed confidence within the development potential of Litecoin and XRP, that are acknowledged as necessary gamers within the digital forex area. If accredited, these ETFs would offer institutional traders with new alternatives to diversify their portfolios by means of direct publicity to the respective cryptocurrencies.
The SEC has but to approve a spot XRP ETF, and the appliance might face additional scrutiny because of the ongoing authorized battle between the company and Ripple Labs, the corporate behind XRP. The SEC has accused Ripple of conducting an unregistered securities providing value $1.3 billion, a authorized dispute that might complicate the approval course of for a spot XRP ETF.
