- Canary Capital utilized for spot Litecoin ETF.
- The ETF goals to supply institutional buyers publicity to the worth of Litecoin.
- Regulatory points could come up, notably relating to market infrastructure and liquidity.
Canary Capital, a significant title on the earth of cryptocurrency funding, has utilized to the US Securities and Trade Fee (SEC) to supply a spot Litecoin exchange-traded fund (ETF).
This current submitting comes simply days after the corporate submitted the same submitting for a spot XRP ETF.
The newest filings sign the corporate's formidable plans to develop into digital asset investments, focusing on institutional buyers searching for dependable publicity to cryptocurrencies.
The objective is to faucet into the potential of Litecoin (LTC)
A newly filed S-1 registration assertion outlines Canary Capital's objective to supply buyers with publicity to the worth of Litecoin (LTC) held by the belief.
In accordance with the submitting, the ETF will monitor the value actions of Litecoin, though particulars of the depositary or fund supervisor weren’t disclosed.
Canary Capital goals to place Litecoin as a compelling alternative for institutional buyers looking for publicity to a “time-tested and dependable cryptocurrency.”
In a press release, the agency emphasised Litecoin's important function within the broader cryptocurrency ecosystem. The digital forex is acknowledged as one of many longest-running blockchains, boasting 100% availability since its inception in 2011.
This spectacular file of safety and reliability, together with important enterprise use circumstances, has positioned Litecoin as a sexy asset for potential buyers.
Canary Capital's transfer to use for a spot Litecoin ETF relies on the idea that the cryptocurrency's resilience and long-term historical past make it a singular and enticing funding choice.
Navigating regulatory obstacles
James Seyffart, an ETF analyst at Bloomberg, joined the submitting, noting that whereas there are exchange-traded merchandise that embrace Litecoin, akin to these from CoinShares in Switzerland and Greyscale belief within the US, they’ve acquired approval from the US SEC. it is not going to be with out its challenges.
There are additionally some ETPs that already maintain Litecoin.$ LITE in Switzerland from @CoinSharesCo $ELTC in Germany from @ETCGroupLLC (now owned @BitwiseInvest )
We even have a @Grayscale belief right here within the US:$LTCN
— James Seyffart (@JSeyff) October 15, 2024
Nonetheless, Seyffart highlighted the chance that Litecoin might be handled equally to Bitcoin when it comes to regulatory classification. Since Litecoin originated as a fork of Bitcoin, it shares a few of its decentralized and commodity traits.
The approval of Bitcoin ETFs earlier this yr set a possible precedent that would work in Litecoin's case, given their shared historical past and comparable traits.
Nonetheless, Seyffart cautioned that regardless of this similarity, Litecoin will nonetheless have to fulfill the SEC's strict market infrastructure and liquidity necessities.
In accordance with the SEC, the present regulatory atmosphere requires a big and liquid futures market that’s federally regulated in the US, which Litecoin presently lacks. This absence of a regulated futures market may complicate the ETF approval course of, particularly beneath the present administration's regulatory framework.
Nonetheless, the upcoming US presidential election may considerably have an effect on the SEC's stance on cryptocurrency ETFs. Former President Donald Trump, who was seen as extra favorable to the cryptocurrency business, has beforehand expressed his intention to take away present SEC Chairman Gary Gensler if he have been to return to workplace.
Ought to there be a shift in SEC management, it may create a extra supportive regulatory atmosphere for cryptocurrency merchandise, together with the potential approval of spot crypto ETFs akin to these for Litecoin and XRP.
Seyffart identified that the submitting of the spot Litecoin ETF might be seen as a strategic transfer in anticipation of a possible change in SEC management.
Nonetheless, a 19b-4 submitting, which the exchanges would submit on behalf of the issuer, continues to be required to start the official approval course of. As soon as that doc is filed, it triggers a particular timeline for the SEC to overview and reply to the ETF utility.
Canary Capital's broader crypto ETF technique
Canary Capital's choice to file for a spot Litecoin ETF comes shortly after its S-1 submitting declaration filed for a spot XRP ETF on Tuesday, reflecting the agency's broader technique to carry extra cryptocurrency ETFs to market.
The corporate expressed confidence within the progress potential of each Litecoin and XRP, that are acknowledged as main gamers within the digital forex area. If permitted, these ETFs would supply new avenues for institutional buyers to diversify their portfolios by direct publicity to the respective cryptocurrencies.
The SEC has but to approve the spot XRP ETF, and the applying could face additional scrutiny as a result of company's ongoing authorized battle with Ripple Labs, the corporate behind XRP. The SEC has accused Ripple of conducting an unregistered $1.3 billion securities providing, a authorized dispute that would complicate the approval course of for the spot XRP ETF.
