Canary Capital’s Litecoin ETF filing adds another contender to the race, but will new SEC leadership give LTC an edge over Solana and XRP?
Table of Contents
Litecoin joins the ETF race
Solana and XRP lead the way
Gensler out, Atkins in: What this means for crypto ETFs
Litecoin joins the ETF race
The race for crypto ETFs in the U.S. might have a new contender, and this time, it’s Litecoin (LTC).
On Jan. 16, Canary Capital, a digital asset and crypto fund management firm, filed an amended S-1 form for a proposed Litecoin exchange-traded fund. Bloomberg ETF analyst James Seyffart shared the update on Twitter.
An amended S-1 filing signals that the issuer is actively addressing regulatory concerns, often incorporating feedback from the Securities and Exchange Commission (SEC). While this doesn’t guarantee approval, it suggests ongoing discussions with regulators.
However, the most crucial step – the 19b-4 filing – is still missing, which means the official clock for SEC approval or denial hasn’t started yet.
“This bodes well for our prediction that Litecoin is most likely to be the next coin approved,” said Bloomberg ETF analyst Eric Balchunas, but he also noted that the looming leadership changes at the SEC remain a “huge variable.”
For context, ETFs allow investors to gain exposure to assets like cryptocurrencies without directly owning them. If approved, Litecoin’s ETF could become the third-spot crypto ETF in the U.S., following Bitcoin (BTC) and Ethereum (ETH).
The market seems to be responding to these whispers. LTC’s price jumped over 16% in the last 24 hours as of Jan. 16, reaching $117.92, making it the fourth-largest gainer among the top 100 cryptos by market cap.
According to on-chain analytics firm Santiment, this rally is fueled by “whales” – large investors holding at least 10,000 LTC – who have added 250,000 coins since Jan. 9.
Santiment also noted that “Litecoin has decoupled from other altcoins,” hinting that the momentum could be more than temporary.
Solana and XRP lead the way
The race for crypto ETFs in the U.S. is heating up, and while Litecoin has entered the fray, Solana (SOL) appears to be further along in the process.
At least five major firms – VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital – filed 19b-4 forms for spot Solana ETFs as far back as November, moving these applications into formal SEC review. This puts Solana ahead of Litecoin in the timeline for potential approval.
The deadlines for these applications are quickly approaching. Grayscale’s Solana ETF is first in line, with a response due by Jan. 23.
The other four issuers, including VanEck and Bitwise, face preliminary decisions by Jan. 25, marking 45 days since the SEC began its formal review.
However, approval is far from guaranteed. The SEC has historically been cautious with spot crypto ETFs, especially for assets without a robust, regulated futures market.
Under Chair Gary Gensler, the agency has maintained that no spot crypto ETFs will be approved unless there’s a highly correlated, regulated futures market for the asset.
Bitcoin and Ethereum met this requirement through their futures markets on the Chicago Mercantile Exchange, but Solana does not yet have this infrastructure.
Meanwhile, the race for a spot in Ripple (XRP) ETF is also picking up speed. Four firms – WisdomTree, Bitwise, 21Shares, and Canary Capital – have submitted applications, with WisdomTree’s filing requiring an SEC response by Jan. 16.
The stakes are high. Banking giant JPMorgan estimates that the Solana and XRP ETFs alone could pull in up to $14 billion in their first year. VanEck’s Matthew Sigel shared JPMorgan’s forecasts on Twitter.
For Solana specifically, projections suggest an inflow of $3 billion to $6 billion. XRP, on the other hand, could potentially attract $4 billion to $8 billion.
Balchunas commented on the projections, noting that while his team hasn’t made formal predictions yet, JPMorgan’s estimates seem reasonable.
Whether Solana or XRP manages to break through the SEC’s barriers first – or if Litecoin leaps ahead – remains a question.
Gensler out, Atkins in: What this means for crypto ETFs
The crypto industry is on the cusp of a profound regulatory makeover as leadership in the SEC prepares for a complete overhaul.
On Jan. 20, outgoing SEC Chair Gary Gensler, known for his aggressive stance on crypto regulation, will step down.
Gensler’s departure coincides with the inauguration of Donald Trump as the 47th president of the U.S., ushering in a new chapter for the SEC under the leadership of Paul Atkins, Trump’s pick for chair.
Atkins, a former SEC commissioner, is widely regarded as a crypto-friendly figure. His approach is expected to stand in stark contrast to Gensler’s enforcement-heavy tenure, during which the SEC pursued over 80 actions against crypto firms, often alleging that various tokens were unregistered securities.
While Gensler’s supporters argue that these actions were necessary to combat fraud and manipulation, critics contend that his approach stifled innovation and created an atmosphere of regulatory uncertainty.
The incoming leadership, however, appears poised to take a more balanced approach. Atkins is expected to collaborate closely with Republican SEC commissioners Hester Peirce and Mark Uyeda, both of whom have been vocal critics of Gensler’s policies.
One of the most crucial shifts is the SEC’s rumored plan to freeze or even withdraw enforcement actions that do not involve fraud allegations. If implemented, this move would signal a dramatic departure from Gensler’s aggressive crackdown, offering the industry a chance to rebuild trust with regulators.
Hence, the stakes are particularly high for the future of crypto ETFs, a sector that could see accelerated approvals under the new SEC leadership.
With Litecoin, Solana, and XRP ETFs already vying for regulatory approval, the industry is watching closely to see whether Atkins will pave the way for a more welcoming environment.