The Bitcoin ETF approval by the SEC has marked the sentiment in early 2024 and may be a gamechanger of the whole cryptocurrency market.
Taking into account the general view of the SEC about altcoins, at a first glance it seems unlikely that an ETF could be approved for a crypto other than Bitcoin in the short term. There are several Ethereum ETF applications, but there are doubts if the SEC considers ETH a commodity-like asset due to its centralized launch and management. It was always controversial if the SEC considers ETH a security, although they have eventually denied it.
Now there are a few altcoins which might qualify as a similar "commodity"-like class of asset than Bitcoin, because they had a "fair" PoW distribution without relevant premine, which was similar to Bitcoin's. The biggest are Dogecoin (DOGE), Litecoin (LTC), Monero (XMR) and maybe Kaspa (KAS) and BCash (BCH).
I consider Litecoin the most likely to be approved, for the following reasons:
- There is already an ETF-like Litecoin product, the Grayscale Litecoin Trust.
- Litecoin is one of the oldest altcoins.
- XMR as a privacy coin is generally not looked at well by govermental actors.
- KAS is quite new, and its launch was borderline fair (there was some mining on "Gamenet", where the coin was only known in a Discord group, and only some weeks later they really went public).
- DOGE is perhaps the other one which could be accepted, but I guess many may consider it as a "joke coin", also the high volatility, dependant on Elon Musk's tweets, may play against it.
- BCH? I don't know, the launch was of course identic to Bitcoin's, but the fork could be seen as a consensus break.
I'm surprised to not see a thread about this topic here (there are several on Reddit though, like
this one, or even one
in r/CryptoCurrency).
So let's discuss. Do you think a Litecoin ETF has a chance? Are there companies that are applying for a LTC ETF (Grayscale, according to the Reddit thread, seems to have announced interest)?
Well, the odds for approving a spot Litecoin ETF is a lot higher than ETH. Especially when the SEC considers the latter to be a security. LTC is similar to BTC, so institutional investment companies can submit their applications without hassle. At least, that's what we hope for. As much as we want market prices to rise, I don't think it's a good idea to institutionalize Litecoin. It will encourage monopolism within the industry.
I'm fine with LTC just the way it is. The cryptocurrency is fairer and more decentralized than BTC. If we let "Wall Street" get in, we'd be embracing the middleman with open arms. That's not what crypto is about. It's about removing middlemen from the system to bring banking to the unbanked. Luckily, it's possible to start a new fork if things go south in the long run. As long as there are people standing in support of decentralization. LTC will survive for generations.
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