Litecoin Price Falters Amid Doubts Over LTC ETF Approval
Last January 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 initial applications for spot ETFs, which heralded a favorable environment for Bitcoin. Prices of top digital assets have soared due to increased institutional attention. It’s no surprise, then, that other top crypto projects have followed suit, with Litecoin (LTC), a proof-of-work currency, appearing on the decision-making table.
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However, Litecoin has had a rocky start to the year. Currently trading at $94.89, down 22% Within the past 30 days. Litecoin’s price performance this week is in line with other altcoins, which have given up some of last year’s gains.
Additionally, cryptocurrency analysts attribute Litecoin’s slide to the diminishing likelihood of a spot LTC ETF being approved in 2025. According to data from Polymarket trackAs of January 13, the chance of approval for a spot LTC ETF this year dropped to 24%.
Litecoin Spot ETF Odds Continue to Fall
The cryptocurrency industry and betting markets have been predicting the possibility of eventually owning one of these spot Litecoin ETFs for months. On December 19, Polymarket odds put the odds at 75%, but started to fall towards the end of the year. At the beginning of this year, the probability was close to 50%, but it quickly began to shrink and currently stands at 24%.
However, some cryptocurrency analysts are optimistic that these ETF Approval will be forthcoming. Bloomberg analyst Eric Balchunas expressed his optimism in an article. He explained that the SEC will approve these funds because they are forks of Bitcoin.
Is the Cryptocurrency ETF Wave Coming?
According to Bloomberg’s Balchunas, the market is ready to welcome the approval of new spot ETFs targeting different tokens. In a Twitter/X post shared on December 18, he said that a combination of Bitcoin and Ethereum ETFs may be approved, while an ETF for Litecoin is likely to be next. He believes that since Litecoin is a fork of Bitcoin, it will be easier for supporters to gain approval.
In addition to Litecoin, Balchunas predicted that HBAR could be next as it is not recognized as a security, followed by XRP/Solana. However, Ripple Since its securities label has a pending lawsuit, it has the lowest chance of approval.
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What’s the future for spot Litecoin ETFs?
Canary Capital is the only company to submit an application for a Litecoin ETF. Analysts also expect Grayscale to follow suit if it decides to convert its Litecoin trust with over $215 million in assets.
Some experts say the future of a Litecoin spot ETF could be uncertain even if it receives SEC approval. Some say it is questionable whether institutional investors will choose these investments. Even the spot ETFs for Bitcoin and Ethereum have been relatively weak. For example, the Bitcoin Fund is backed by $107 billion in assets, accounting for only 5.7% of Bitcoin’s total market capitalization.
Ethereum, on the other hand, has $11.6 billion, accounting for only 2.96% of the total asset market capitalization. Since Litecoin is a smaller cryptocurrency project, many analysts do not have high expectations for the spot LTC ETF.
Featured images from Pexels, charts from TradingView
