Bloomberg exchange-traded fund (ETF) analysts have tipped a 90% chance that the US securities regulator will approve a spot Litecoin ETF before the end of the year.
Bloomberg’s James Seyffart and Eric Balchunas see its chances of being approved in 2025 as higher than other ETFs currently proposed, including a spot XRP (XRP), Solana (SOL) and Dogecoin (DOGE) ETF — which they see as having a 65%, 70% and 75% chance respectively.
Litecoin (LTC), which was created as a faster alternative to Bitcoin (BTC) in 2011, shares a similar proof-of-work consensus mechanism to Bitcoin.
Posting on X, the pair said that Litecoin’s path toward SEC approval may be the most straightforward as S-1 and 19b-4 forms have already been filed and acknowledged, while the SEC also likely views it as a commodity.
List of candidate crypto ETFs vying for SEC approval. Source: James Seyffart
The race for more crypto ETFs follows strong demand from the spot Bitcoin and Ether (ETH) ETFs, which have chalked up $40.7 billion and $3.18 billion worth of net inflows since launching in January and July 2024, respectively, Farside Investors data shows.
While Seyffart doesn’t think a Litecoin ETF would attract that much demand, he said it could still be worthwhile for fund companies with as little as $50 million in some cases.
“They don’t have to hit it out of the park on a flows basis to be worthwhile from an issuer perspective,” Seyffart told Cointelegraph.
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The final deadline for the SEC to decide on the Litecoin, Solana, XRP and Dogecoin ETFs is between Oct. 2 and Oct. 18, Seyffart’s chart shows. A Litecoin ETF could launch before then, Seyffart said.
Seyffart and Balchunas also acknowledged that ETFs for Hedera (HBAR) and Polkadot (DOT) had been filed by Canary Capital and 21Shares but have not yet placed any approval odds at the time of writing.
Expect to see more crypto ETF filings
Seyffart said more crypto ETFs could be proposed, too, predicting US-based ETF issuers to follow a “spaghetti cannon approach.”
“Issuers will try to launch many many different things and see what sticks,” Seyffart said.
“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 noted that the odds for all of these crypto ETFs — except Litecoin — were below 5% before US President Donald Trump won the US election on Nov. 5, 2024.
Regulatory work still needs to be done with XRP, Solana
Meanwhile, questions remain over Solana and XRP’s security status, with Seyffart predicting that an XRP ETF wouldn’t be approved until the SEC’s lawsuit against Ripple is fully resolved.
Source: James Seyffart
Ripple scored a partial victory in August 2023, when it was ruled that XRP isn’t a security when sold on secondary markets — however, the SEC appealed this court decision, claiming that Ripple breached securities laws when it sold XRP to retail investors.
However, these actions were taken under the Gary Gensler-led SEC, and Ripple is now hoping that the new SEC leadership, currently led by acting chair Mark Uyeda, will withdraw the enforcement case.
The security status of Solana will also need to be resolved before the SEC can analyze Solana under a “commodities ETF wrapper,” Seyffart said last month.
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