The Future of Litecoin ETFs Hangs in the Balance
Following the approval of spot ETFs for Bitcoin by the US Securities and Exchange Commission (SEC) in January 2024, the cryptocurrency market has been buzzing with excitement. Institutional interest in Bitcoin has skyrocketed, leading to a surge in its price. Now, all eyes are on Litecoin (LTC), another top crypto project, as it waits for a decision on spot ETFs.
Litecoin’s Rocky Start in 2025
Unfortunately, Litecoin has had a rough start to the year. Currently trading at $94.89, the coin has experienced a 22% decline in the last 30 days. This downward trend is in line with other altcoins that have seen a correction after a strong performance last year.
Analysts attribute Litecoin’s recent slide to the diminishing chances of spot LTC ETF approval in 2025. According to Polymarket’s tracking data, the probability of approving these ETFs this year has dropped to 24% as of January 13th.
Odds of Spot ETFs for Litecoin on the Decline
For months, industry experts and betting markets have been speculating on the likelihood of spot Litecoin ETFs getting the green light. Initial estimates put the odds at 75% in December 2024, but they have steadily declined since then. Currently, the chances stand at a mere 24%, signaling a growing skepticism in the market.
Despite the pessimism, some analysts remain hopeful that the SEC will eventually approve these ETFs. Eric Balchunas, a Bloomberg analyst, believes that the similarities between Litecoin and Bitcoin make a strong case for approval.
A Wave of Crypto ETFs Approaching?
Balchunas also predicts that the approval of new spot ETFs for various cryptocurrencies is on the horizon. He suggests that a Bitcoin and Ether ETF combo could be the next in line, with Litecoin’s ETFs following closely behind. He argues that Litecoin’s relationship to Bitcoin could work in its favor during the approval process.
Additionally, Balchunas speculates that HBAR may be among the next cryptocurrencies to receive ETF approval, while XRP faces challenges due to an ongoing lawsuit regarding its classification as a security.
What Lies Ahead for Spot Litecoin ETFs
Canary Capital is currently the only company that has filed for a Litecoin ETF application. Analysts are also keeping an eye on Grayscale, which may convert its Litecoin Trust, holding more than $215 million in assets, into an ETF.
However, the future of spot ETFs for Litecoin remains uncertain even if they do get the green light from the SEC. Some experts question whether institutional investors will show interest in these products, given the lackluster performance of Bitcoin and Ether ETFs. With Bitcoin funds representing just 5.7% of the coin’s market cap and Ethereum ETFs accounting for 2.96% of the asset’s total market cap, expectations for Litecoin ETFs are modest.
As the cryptocurrency market continues to evolve, the fate of Litecoin’s spot ETFs hangs in the balance, waiting for a decision that could shape the future of this popular digital asset.
Featured image from Pexels, chart from TradingView