SEC Recognizes Canary Capital’s Litecoin ETF Application
The Securities and Exchange Commission of the United States has officially recognized a 19b-4 application from Canary Capital for a spot Litecoin exchange-traded fund.
Bloomberg’s senior ETF analyst Eric Balchunas claims that it is the first altcoin 19b-4 application to be recognized this way. SEC previously made other altcoin ETF applicants pull their filings under Chairman Gary Gensler.
This filing automatically triggers a 240-day review period in which the SEC must approve or disapprove of it. Analysts speculate that the regulator may use the full period or approve the ETF before the period elapses.
Public Comment Period Opens
The commission has now opened a public comment period in which investors can give their views on the spot Litecoin ETF through designated channels.
This is seemingly a friendly turn by the SEC towards crypto ETFs, but it’s not clear whether this signals a wider acceptance of altcoin ETFs.
Litecoin ETF: The Next to Get the Green Light?
Canary Capital filed its application on the heels of an amended S-1 registration statement filed last week that has raised optimism over its approval.
Balchunas added that an ETF focused on Litecoin was the likeliest among others to get approved because it has ‘the same structure’ as Bitcoin’s already-in-place spot ETF.
Litecoin Gains 12%
As a result of this acknowledgment by the SEC, the price of Litecoin surged 12%, trading at $125.39 against the US dollar at the time of writing, based on CoinMarketCap data.
The market has reacted positively to such news, depicting very strong interest and confidence in the event of a regulated Litecoin ETF.
Why Litecoin ETF Has a Strong Approval Case
Dubbed “digital silver”, Litecoin shares Bitcoin’s proof-of-work mechanism, which makes it more favorable for ETF approval than other altcoins.
Unlike Ripple (XRP) and Solana (SOL), Litecoin has never been classified as a security by the SEC. This fact gives it a regulatory advantage and increases its chances of approval.
Furthermore, under Exchange Act Rule 19b-4, the SEC must issue an order following formal review to ensure an ETF meets market impact and operational safeguards before approval.
The Future of Crypto ETFs
That same confidence has been voiced by Balchunas: he has promised a wave of crypto ETFs to be approved in 2024, headlined by the combo Bitcoin/Ethereum funds and followed with Litecoin. Even HBAR, XRP, and Solana ETFs are possibilities, but those projects likely have more at bat due to security classification issues.
For example, with more than 33 crypto ETF applications put forth within the first 24 hours of Trump’s presidency, the SEC is buckling under the weight of digital asset consideration. If approved, the Litecoin ETF could set the stage for broader institutional investment in altcoins.
