Asset management firms Grayscale and Coinshares have entered the competition to introduce a Litecoin (LTC) Spot ETF, eliciting reactions from the cryptocurrency community that range from enthusiasm to skepticism.
Litecoin Spot ETF: Reactions from the Crypto Community
On January 24, Coinshares submitted an S-1 registration document to the US Securities and Exchange Commission (SEC) for the COINSHARES LITECOIN ETF (the “Trust”), a spot exchange-traded fund designed to provide investors with exposure to cryptocurrency LTC.
At the same time, Grayscale filed a 19b-4 form with the regulatory body to list and trade its Grayscale Litecoin Trust, hinting at a possible shift to a Spot ETF structure. With this move, both asset managers have aligned with Canary Capital in their quest to be the first to launch a Litecoin Spot ETF.
This announcement has sparked considerable excitement in the crypto community, as a spot ETF typically signals direct institutional adoption, which could lead to substantial price increases, as witnessed in the Bitcoin market. Nevertheless, some market analysts have criticized the concept of a Litecoin Spot ETF, arguing it lacks substantial potential for success.
Notable crypto authority, Ali Martinez, suggests that the Litecoin market appears largely unprepared for a spot ETF, given that the asset has hovered within the same price range for the past eight years. Martinez advises asset managers to consider launching a USDT ETF instead, which would allow investors to generate staking yields at the very least.
In another post on X, analyst with the handle djThistle01 expressed doubts about the viability of an LTC ETF, particularly as the asset has persistently fallen against Bitcoin over the decade.
Conversely, other analysts argue that Litecoin’s network activity compensates for its minimal price movement. According to entrepreneur Tarun Tejpal, the transaction volume of LTC has been increasing since November 28. Significantly, between January 13-20, 2025, Litecoin handled more than $69 billion in transactions, averaging around $10 billion daily.
Another LTC supporter, Aristotle’s Money, also pointed out that the asset was recognized as the most utilized cryptocurrency for payments in 2024 based on data from BitPay, indicating noteworthy market interest.
Is A Litecoin Spot ETF Likely to Succeed?
In a somewhat ironic twist, the proposal for a Litecoin Spot ETF has divided the cryptocurrency enthusiasts and analysts. Notably, this discussion may soon reach a conclusion, as LTC is positioned to secure a spot ETF ahead of other altcoins such as Solana and XRP.
This expectation is bolstered by developments like the recent S1-amendment submission from Canary Capital, which indicates ongoing discussions with the SEC. As of this moment, Litecoin is trading at $123.91, reflecting a 0.72% increase over the previous day.
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