Analysts Predict Litecoin ETF Approval May Be Imminent Following SEC Engagement

ETF analyst James Seyffart has shared that Canary Capital amended the S-1 filing for its Litecoin ETF, a step that suggests increased engagement from the US Securities and Exchange Commission (SEC).

The latest development regarding the proposed Litecoin ETF has sparked optimism in the market.

Litecoin Could Be the Next Crypto ETF to Receive SEC Approval

Although Seyffart noted that there are “no guarantees,” the amended filing may indicate that the SEC has started reviewing the proposal more closely.

“CanaryFunds just filed an amended S-1 for their Litecoin ETF filing. No guarantees — but this might be indicative of SEC engagement on the filing. Still no 19b-4 filing yet though.(A 19b-4 would actually start the potential approval/denial clock) h/t,” Seyffart wrote on Twitter on 16 January.

For context, the S-1 filing is a crucial step in the SEC’s approval process for any new investment product. While the amendment itself does not guarantee approval, it does signal that the SEC is paying attention to the proposal. 

However, as Seyffart points out, a 19b-4 filing has not yet been submitted. It is a formal request to list and trade the ETF on a national securities exchange.

This filing is essential to start the official clock for the SEC’s potential approval or denial of the ETF, meaning the process could still take some time.

Canary Capital filed for the Litecoin ETF in October last year, less than a month after it applied for an XRP ETF.

Eric Balchunas, another Bloomberg analyst, further supported the idea that the SEC has begun engaging with the Litecoin ETF filing. Balchunas cited “chatter” suggesting that the SEC had provided feedback on the S-1, which he believes strengthens the case for Litecoin to become the next crypto to receive ETF approval. 

Balchunas and Seyffart both believe that the approval of a Litecoin ETF could be imminent. However, they caution that the appointment of a new SEC chair represents a significant variable that could impact the timeline. To date, the SEC has been cautious in approving cryptocurrency ETFs, with Bitcoin and Ethereum ETFs receiving some notable scrutiny.

The ETF news boosted Litecoin’s price as LTC was trading at $119.22 at press time. The crypto’s price rose 16.8% over the past 24 hours.

Litecoin Price Performance. Source: BeInCrypto

Additionally, Grayscale’s Litecoin Investment Trust already offers US investors LTC exposure through its ETP. It appears that the Grayscale Trust has quietly amassed over 500,000 LTC in 2024.

Grayscale LTC Holdings. Source: Coinglass

Based on Coinglass data, the Trust held less than 1.5 million LTC coins in January 2024. A year later, the investment giant’s holdings have increased to over 2 million. Grayscale’s move suggests that the firm anticipates strong investor interest in Litecoin.