Litecoin (LTC) Is “Most Likely” to Get a U.S. ETF Wrapper Next, According to Senior Bloomberg ETF Analyst Eric Balchunas

Following the SEC's approval of spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) in 2024, the big question for many crypto market participants has been which crypto asset would get the highly coveted traditional investment wrapper next.

Litecoin is “most likely” to be the next crypto asset to receive an ETF wrapper in the U.S., according to Senior Bloomberg ETF analyst Eric Balchunas.

The statement comes following reports that Canary Capital had filed an update to its S-1 filing for a Litecoin ETF, an indication of SEC engagement. An S-1 is a registration statement filed with the SEC by firms seeking to launch a new security.

Canary Capital updated its filing to show that U.S. Bancorp Fund Services would administer the proposed ETF, while Coinbase and BitGo will provide custody services for the fund’s Litecoin.

According to Balchunas, this development bodes well for Litecoin's chances of securing the ETF wrapper next. However, he adds that the impending change in SEC leadership could significantly influence the final decision.

As Gary Gensler's term as SEC Chair expires next week with Donald Trump assuming the presidency, it remains to be seen how quickly crypto-friendly Paul Atkins, Trump's nominee to succeed Gensler, will be confirmed by the Senate.

Meanwhile, Senior Bloomberg ETF analyst James Seyffart has highlighted the importance of monitoring 19b-4 filings, which would confirm efforts to approve or deny the offering.

NEW: @CanaryFunds just filed an amended S-1 for their Litecoin ETF filing. No guarantees — but this might be indicative of SEC engagement on the filing. Still no 19b-4 filing yet though

(A 19b-4 would actually start the potential approval/denial clock) h/t @isabelletanlee pic.twitter.com/wFtNOmbmYx

— James Seyffart (@JSeyff) January 15, 2025

The form contains details on listing rules and justifications for the product. Unlike the S-1, which is filed by the prospective issuer, the 19b-4 is filed by self-regulatory organizations (SROs), usually the exchange the ETF intends to trade on. In the case of Canary Capital's planned Litecoin ETF, this would be the Nasdaq.

While some may be surprised by Litecoin getting an ETF before Solana and XRP, considering it is an older and less utilized crypto asset, it should come as no surprise given the present SEC leadership's stance on classifying crypto assets.

LTC? Why? https://t.co/0cqQahyhcj

— Jordan23_45_42 (@jordan23_45_42) January 16, 2025

The Gensler-led agency has repeatedly expressed concerns about most crypto assets except Bitcoin and has specifically named Solana and XRP as unregistered securities in ongoing enforcement actions.

Given this, it is clear how Litecoin could easily gain the agency's approval. It shares many characteristics with Bitcoin, including the diminishing involvement of its original developers.

Following the recent amendment to Canary Capital's S-1 filing, Litecoin has unsurprisingly outperformed the top 20 crypto assets by market capitalization, surging nearly 17% on the day to trade above $119.