Litecoin ETF has a 90% chance of receiving SEC approval in 2025.
According to Bloomberg ETF analysts, Litecoin regulatory filings have been accepted, and the SEC is likely to regard it as a commodity.
Bloomberg exchange-traded fund (ETF) analysts predict a 90% possibility that the US securities regulator would approve a spot Litecoin ETF before the end of the year.
Bloomberg’s James Seyffart and Eric Balchunas believe it has a better chance of being authorised in 2025 than other ETFs being proposed, such as a spot XRP, Solana, and Dogecoin ETF, which they rate at 65%, 70%, and 75%, respectively.
Litecoin, which was launched as a quicker alternative to Bitcoin in 2011, uses the same proof-of-work consensus method as Bitcoin.
The pair posted on X that Litecoin’s path to SEC clearance may be the simplest because S-1 and 19b-4 forms have already been filed and acknowledged, and the SEC is also likely to consider it as a commodity.
The push for more crypto ETFs follows high demand from spot Bitcoin and Ether ETFs, which have received $40.7 billion and $3.18 billion in net inflows since their launches in January and July 2024, respectively, according to Farside Investors statistics.
While Seyffart does not believe a Litecoin ETF would be in high demand, he believes it may be beneficial for fund companies with as little as $50 million in some situations.
“They don’t have to hit it out of the park based on flow to be worthwhile from an issuer perspective,” Seyffart told Cointelegraph.
The SEC’s final decision on the Litecoin, Solana, XRP, and Dogecoin ETFs is expected between October 2 and October 18, according to Seyffart’s graphic. Seyffart believes a Litecoin ETF could be launched before then.
Seyffart and Balchunas revealed that Canary Capital and 21Shares had registered ETFs for Hedera and Polkadot, but no approval odds have been set as of writing.
Expect to see more crypto ETF filings
Seyffart predicted that more crypto ETFs might be launched, with US-based ETF issuers using a “spaghetti cannon approach.”
“Issuers will try to launch many many different things and see what sticks,” according to Seyffart. “You will probably see a long tail of ETFs holding digital assets in the long run, and the ones that don’t garner interest or flows will simply liquidate.”
Balchunas highlighted that the probabilities for all of these cryptocurrency ETFs, except Litecoin, were less than 5% before US President Donald Trump won the election on November 5, 2024.
Regulatory work still needs to be done with XRP, Solana
Meanwhile, doubts remain over Solana and XRP’s security status, with Seyffart forecasting that an XRP ETF would not be permitted until the SEC’s action against Ripple is entirely settled.
Ripple had partial success in August 2023, when it was determined that XRP is not a security when traded on secondary markets. However, the SEC challenged this court judgement, saying that Ripple violated securities regulations by selling XRP to individual investors.
However, these moves were taken by the Gary Gensler-led SEC, and Ripple is now hopeful that the new SEC leadership, led by acting chair Mark Uyeda, will drop the enforcement case.
The security status of Solana must also be determined before the SEC can evaluate it under a “commodities ETF wrapper,” Seyffart stated last month.
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