Chances for a Litecoin (LTC) ETF?

[d5000]

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)?

[1714226940]

1714226940

[tsaroz]

As SEC are looking for excuses for not-listing ETH ETFs. So, Litecoin would surely be a good option considering it's economics is similar to bitcoin. Even though it's a different algo, it's supply are limited, the coin is POW making it more similar to bitcoin than any other popular altcoins.
As you mentioned, BCH is another good alternative which also has a more active developer team than LTC but again, ETF listing are more initiated and carried out by investment firm than the coins developer. There are news of Ripple paying lobbyist for ETF listing so the game of listing would be an entertaining one.

[mk4]

Funnily enough, I actually think there's a decent chance that LTC might get an ETF earlier than ETH, simply because LTC is pretty simple and boring like Bitcoin, unlike ETH whereas lots of controversial things happened in the past(other than Consensys and the Ethereum Foundation dumping ETH). ETH only gets an ETF first if the ETF issuers sort of force it because ETH has far higher demand.

As for the other coins you've mentioned, I doubt it.

[naikturun]

I doubt LTC will be accepted by ETF after BTC and ETH, simply because there are so many other altcoins, if there are other coins that will be voted on by the SEC, I predict Solana will be next, there is no particular reason but Solana has demand higher.

[mk4]

I doubt LTC will be accepted by ETF after BTC and ETH, simply because there are so many other altcoins, if there are other coins that will be voted on by the SEC, I predict Solana will be next, there is no particular reason but Solana has demand higher.

Demand for Solana might be higher but it has only existed for like 3-4 years, and supply is still heavily held by venture capitalists so I doubt it will get an ETF any time soon. Litecoin on the other hand, has existed for far longer with little to no scandals and stuff and far better supply distribution.

[Huppercase]

I doubt LTC will be accepted by ETF after BTC and ETH, simply because there are so many other altcoins, if there are other coins that will be voted on by the SEC, I predict Solana will be next, there is no particular reason but Solana has demand higher.

You think those are the criteria US SEC used to consider an ETF to be accepted? You need to understand that once a coin is consifer as a security by Security exchange commission, you are in big battle to with them because you are about to lose money to the government because of the sue that will follow after. Any coin that is term as security always have issues of breaking the SEC law and you want to categorized Solana because of demand? No, Litecoin will get that approval before Solana get one.

You didn't even consider what has happened to Solana with FTX and pending case of security that they have been avoiding. What about the $1.16B of Solana they have to liquidate to get back the exchange running and to say that this worth was around September last year. The coin has pumped massively due to their underground things and you think Solana will get such a quick approval? I don't think so because if it took Bitcoin 10 years since the first time of fillings to 2024, Solana application might just get it's way into the junk yard.

[d5000]

Let's see what already exists. I've currently found three financial products for LTC:

Grayscale Litecoin Trust (LTCN) (US)
ETC Group Physical Litecoin ETP (ELTC) (Germany/UK) (more info)
Coinshares Physical Litecoin ETN (LITE) (Switzerland/UK) (more info)

If there are more, please add

When googling I briefly thought that BlackRock owned LTC already, but it was the LTC share from "LTC Properties, Inc."

I also agree that Solana is probably not a good candidate for an ETF. It's one of the most centralized coins out there (after XRP and BNB perhaps) and the SEC already classified it as a security, and that would probably make an ETF impossible.

[Hispo]

I believe it is a matter of time for Litecoin to also get its ETF in the markets, but I believe it will be after Ethereum gets its own.
You have got some valid points on why Litecoin is a very good candidate for getting that approval.
I would love to also see other coins like Monero and Dogecoin to get their EFT approved, but in the case of Monero, I agree with you that the SEC would never dare to give that huge advertisement to a project which is pretty much frown upon by the federal government and law enforcement agencies or pretty much all the civilized world. On the other hand, Dogecoin was conceived as a joke, but we all can agree it was transcended the joke/meme territory and actually became an asset which people can take seriously if keep in mind it's market capitalization and volume.

What is a coin without volume and liquidity? Basically nothing, and Dogecoin has both the volume and liquidity, it only thing it lack for it to get the approval faster is the aura of seriousness which other alternative coins give off.

Still, I am expecting for the expectrum and variety of ETF to be quite reduced at first, it could take years before we see Dogecoin getting that treatment, Litecoin is likely to get it after Ether.

[adaseb]

There might be an ETH etf but I am pretty sure there will not be a ltc etf. Sure it’s similar to bitcoin and all but nobody really uses it anymore. It was more popular during 2017 when people used it due to smaller fees but now people moved on to ETH l2 solutions.

So even if it was totally possible to have an ltc etf, most likely there will be no demand for it and it would just close down. The ETH etf is the only non-bitcoin crypto I can see that actually gets a spot etf going.

[paul.lee.attorney]

I doubt LTC will be accepted by ETF after BTC and ETH, simply because there are so many other altcoins, if there are other coins that will be voted on by the SEC, I predict Solana will be next, there is no particular reason but Solana has demand higher.

You think those are the criteria US SEC used to consider an ETF to be accepted? You need to understand that once a coin is consifer as a security by Security exchange commission, you are in big battle to with them because you are about to lose money to the government because of the sue that will follow after. Any coin that is term as security always have issues of breaking the SEC law and you want to categorized Solana because of demand? No, Litecoin will get that approval before Solana get one.

You didn't even consider what has happened to Solana with FTX and pending case of security that they have been avoiding. What about the $1.16B of Solana they have to liquidate to get back the exchange running and to say that this worth was around September last year. The coin has pumped massively due to their underground things and you think Solana will get such a quick approval? I don't think so because if it took Bitcoin 10 years since the first time of fillings to 2024, Solana application might just get it's way into the junk yard.

Fully agree that the key points of whether a coin will be approved for ETF depends on whether the ICO will be recognized as IPO of securities.  In case the coin provides anticipation of investment returns and the income of offering were collected and enjoyed by certain group of people, then, such coin will probablly be catigorized as securities, and, SEC will probablly reject the application of ETF.

[d5000]

nobody really uses it anymore. It was more popular during 2017 when people used it due to smaller fees but now people moved on to ETH l2 solutions.

That may seem so due to the relatively unspectacular price evolution, but is actually not true:



You can see that the number of Litecoin transactions in late 2023/early 2024 is partly even higher than Bitcoin's. In 2017 it stood mostly below 25k/day, only at the year's end it had a small local high of around 100-200k/day, when Bitcoin had its first "fee crisis". In late 2020 LTC returned to these levels pushed by an adoption by adult and other services, stagnating for two years at about a third to half of Bitcoin's number, and in 2023 it saw another increase (since December it stood firmly above 200k/day) pushed by the Litecoin Ordinals port which seems to be quite popular.

Edit: red number in the upper right corner may be misleading, it's from 2016 (my mouse was just at this point) - so you see how low the usage were in this year compared to now (~150-200k per day).

[o48o]

-cut-
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)?

Question is that is there enough interest for it? Because when it comes to fundamentals, and things SEC would be interested on, it's very similar to bitcoin. It didn't have ico. Founder even sold his coins, so there's even less confusion compared to Satoshi and his coins.

So it really comes to the question if there's even need for etf. Legally speaking i can't find any reason why it would get a pass. Other then is everyone getting etf then? Even those numerous bitcoin forks? Where they would draw a line if to not pointless coins that aren't really innovations but variations of each other.

[kentrolla]

There might be an ETH etf but I am pretty sure there will not be a ltc etf. Sure it’s similar to bitcoin and all but nobody really uses it anymore. It was more popular during 2017 when people used it due to smaller fees but now people moved on to ETH l2 solutions.

So even if it was totally possible to have an ltc etf, most likely there will be no demand for it and it would just close down. The ETH etf is the only non-bitcoin crypto I can see that actually gets a spot etf going.

Aligned, as I don't see any chances for LTC spot ETF but yes ETH spot ETF may be approved and why would anyone file for LTC ETF when people don't prefer it as it's key upselling point which was lesser transaction fee and lightening speed but now there are lot better options available in the market and LTC has kind of stayed behind as there has been no updates on development from the team and why would people choose it now I would say it's a collective failure and won't make sense even to apply for spot ETF.

[tyz]

I recently wrote in another post that I think the Etherum Spot ETF will be next and it won't take long for that to happen. Etherum has all the prerequisites for the ETF to be approved. After that, I think that candidates such as LTC, Solana or Cardano will follow at a distance. But that will still take a while for those. I can rather imagine that there will be an ETF on a kind of crypto index that includes several coins, including LTC.

[batang_bitcoin]

Question is that is there enough interest for it? Because when it comes to fundamentals, and things SEC would be interested on, it's very similar to bitcoin. It didn't have ico. Founder even sold his coins, so there's even less confusion compared to Satoshi and his coins.

There is for sure interest of it, and there's even better consideration of LTC than ETH because of many factors. While if SEC is gonna take a look at ETH, there's so much consideration that they have to make and as for Litecoin, there's no need to discuss a lot of things. At the end of it, it's still going to depend on the applicant of the ETF for LTC and how they're going to discuss that with the SEC especially with Gensler.

[Bureau]

Litecoin has a better chance of getting approved over Ethereum. Ethereum staking and it's centralized nature will not help it to get it's approval from the SEC. Litecoin is not that famous as it used to be earlier but it does have a good marketcap. It does have a community that governs it and that will be it's plus point.

[Mate2237]

Litecoin has a better chance of getting approved over Ethereum. Ethereum staking and it's centralized nature will not help it to get it's approval from the SEC. Litecoin is not that famous as it used to be earlier but it does have a good marketcap. It does have a community that governs it and that will be it's plus point.

Litecoin is also one of the top top cryptocurrencies so SEC can approve the ETF for Litecoin. Even Ethereum was on the pipeline but I don't know if that has been approved or not, because I have not seen a post on that. And if SEC approved the Litecoin ETF then that will make Litecoin to grow faster again and it will be very famous in the ecosystem. Litecoin is more decentralized than Ethereum so people will like to use it more than others.

[tyz]

There might be an ETH etf but I am pretty sure there will not be a ltc etf. Sure it’s similar to bitcoin and all but nobody really uses it anymore.

I cannot confirm this. Litecoin is the best crypto to make smaller transactions in times when Bitcoin and Ethereum transaction fees are too high (which is quite often the case), therefore I regularly use Litecoin as a replacement for BTC and ETH. Just a few days ago I wanted to make a BTC transaction of 0.001 BTC and would have had to pay $17 for the transaction. I then swapped the BTC for around a $1 to LTC and sent the Litecoin for less than one cent in fees.

[d5000]

Not an ETF, but Coinbase has announced they are seeking approval for a Litecoin-based future (together with similar contracts for Doge and BCH) from the CFTC. The products would be "cash-settled" and would be listed from April 1 on.

An analyst, James Seyffart, has described the move as an attempt to clarify if PoW currencies with similar characteristics to Bitcoin could be generally "whitelisted" by the SEC as commodities (and not securities). So this could be seen as an important previous step to a Litecoin-based ETF.

According to this article the CFTC has already approved them, but I'll search more to confirm this, and it would also be interesting how the SEC could possibly "interfere" if it doesn't agree with the "commodity" theory. (Edit: Looks the approval is correct as shown on CFTC website.)

In comparison, the chances for an Ethereum ETF are decreasing according to several analysts, as the SEC is apparently again considering to categorize ETH as a security.

[FinneysTrueVision]

Litecoin has one of the better chances of an ETF approval. It is an established crytpcurrency and it doesn’t have all the scammy ponzinomics associated with many altcoins. It is a coin that has some utility but I don’t know if it is popular enough as an investment for an ETF product to be necessary. Institutions see greater potential in altcoins which are seen as more innovative but I could see Litecoin ETFs gaining more momentum if regulators see other Litecoin investment products as acceptable.