Canary Capital Applies for Litecoin ETF, Submits S-1 File

TL:DR Breakdown

• Canary Capital thinks Litecoin (LTC) is the next big thing for institutional investors. 
• Bloomberg’s James Seyffart chimed in, saying Litecoin is probably gonna play by the same rules as Bitcoin—because if Bitcoin can do it, why not Litecoin too?

Canary Capital has filed paperwork with the Securities and Exchanges Commission for a Litecoin ETF, just days after doing the same for an XRP product. 

The Canary Litecoin spot exchange-traded fund will give investors exposure to the price of LTC held by the Trust, though the filing failed to mention who will act as the custodian and administrator.

Canary Capital, founded by Steven McClurg (also the brain behind Valkyrie Funds), is betting big on Litecoin. They’re calling it a “leading player” in the crypto space and think it’ll catch the eye of institutional investors. 

According to Canary, Litecoin’s been around the block with 100% uptime since day one, proving itself as secure and reliable, with some enterprise-grade use cases to boot.

Bloomberg’s ETF analyst James Seyffart noted that other funds, like CoinShares in Switzerland and Grayscale in the U.S., already hold Litecoin. Plus, he thinks Litecoin could follow Bitcoin’s regulatory path now that the SEC greenlit spot Bitcoin ETFs earlier this year. 

Because apparently, what’s good for Bitcoin might just be good for Litecoin, too.

However, Seyffart claims—getting an ETF approved under the current administration isn’t exactly a walk in the park,” Seyffart explained. First, the digital asset will need a sizable, liquid futures market that’s federally regulated in the US, and Litecoin doesn’t check that box at the moment.

But there’s a potential wildcard: the upcoming presidential elections. 

With former President Trump seen as friendlier to crypto and vocal about giving SEC Chair Gary Gensler the boot, things could shift.

As such, this ETF play seems like a bet on Trump winning and shaking things up at the SEC Seyffart added, and even then, we’d need to see a 19b-4 filing to get the ball rolling on any SEC decision.

In case you’re wondering, a 19b-4 is the official doc exchanges file for issuers to kick off the SEC’s approval process. 

Earlier this month, Canary Capital filed an S-1 registration for a spot XRP ETF, and Bitwise jumped in with a similar filing too. 

Fun fact: the SEC has never approved a spot XRP ETF before, so if this one gets through, it’s bound to face some uphill battles. Why? Well, the SEC has been locked in a legal brawl with Ripple, accusing them of raising $1.3 billion by selling XRP, which the agency considers an unregistered security. 

Thus yeah, expect some fireworks if this ever moves forward!