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Bloomberg Senior ETF Analyst Eric Balchunas has suggested that Litecoin may be the next major token to earn approval for a U.S. spot exchange-traded fund (ETF). His assessment follows an amended S-1 filing by Canary Capital on Wednesday, reigniting the conversation around expanding crypto-based investment products.
Amended S-1 Sparks Renewed Hope
Balchunas’s comments came soon after Canary Capital submitted its updated S-1 registration form to the U.S. Securities and Exchange Commission (SEC), aiming to secure clearance for a Litecoin ETF. The S-1 is a foundational document companies file when offering new securities to the public. According to Balchunas, chatter in the industry suggests the SEC has already provided feedback on Canary’s initial application, which he interprets as a positive sign for this altcoin’s prospects.
“We had heard chatter that the Litecoin S-1 had gotten comments back from [the] SEC,” Balchunas noted in a post on social media. The analyst added that this development “bodes well for our prediction that this altcoin will most likely be the next to be approved.”
The SEC Leadership Factor
However, Balchunas acknowledged a “huge variable” that could alter the approval timeline: the departure of SEC Chair Gary Gensler next Monday. President-elect Donald Trump’s choice for Gensler’s replacement is former SEC Commissioner Paul Atkins, who is considered friendlier to digital assets. But it’s still unclear when — or even if — the Senate will confirm Atkins’s nomination, leaving a significant question mark over the regulatory scenario.
Some market observers believe that a leadership change at the SEC could expedite the approval of spot crypto ETFs, given Atkins’s previously positive stance on blockchain and cryptocurrency projects. Others caution that any appointment, no matter how crypto-friendly, must still navigate the complex processes inherent in financial regulation.
Insights from Other Analysts
James Seyffart, another Bloomberg analyst, also chimed in on Canary’s updated filing. He suggested that the amendment to the S-1 signifies an ongoing dialogue between Canary and the SEC, a step often interpreted as progress. Still, Seyffart indicated the real green light would come via a 19b-4 filing — a formal request for a rule change from a self-regulatory organization such as the New York Stock Exchange. If Canary proceeds with this document, it could signal a more concrete path toward approval.
Canary’s Vision for a Litecoin ETF
Canary first filed its S-1 for a Litecoin ETF in October of last year. In the newly amended version, the company revealed U.S. Bancorp Fund Services as the ETF’s administrator, while Coinbase Custody Trust and BitGo would act as custodians. These updates underscore Canary’s commitment to instituting robust safeguards for the proposed fund.
In a statement shared last October, Canary emphasized its reliability: “As one of the longest-running blockchains with 100% uptime since its inception, the altcoin has demonstrated a proven track record of security and reliability with significant enterprise-grade use cases.”
Litecoin’s Market Standing
Created in 2011 as a faster alternative to Bitcoin, Litecoin remains one of the market’s enduring cryptocurrencies. With a market capitalization of roughly $8.9 billion, the token ranks as the 25th largest cryptocurrency, according to The Block’s crypto price data. At the time of writing, LTC was trading at around $118.54, up 15% in the past 24 hours.
Ripple Effects on Altcoin ETFs
The growing momentum for spot Bitcoin and Ethereum ETFs has opened the door for issuers looking to capitalize on other digital assets. Major players have filed applications tied to altcoins like Solana and XRP, and a recent JPMorgan report estimates that new Solana and XRP ETFs alone could draw in up to $13.6 billion in fresh capital over the next six to twelve months if approved. Market watchers believe LTC could follow a similar trajectory if it secures regulatory backing for a spot ETF.
Conclusion:
While Balchunas and Seyffart appear bullish on Litecoin’s likelihood of approval, the process is far from guaranteed. The SEC’s changing leadership could either expedite or delay key decisions, depending on the priorities of incoming officials and the agency’s stance on regulating digital assets. Even if the regulatory pendulum swings in LTC’s favor, a 19b-4 filing remains a critical milestone that can significantly influence the ETF’s fate.
For now, Canary’s updated S-1 stands as an encouraging sign for those anticipating the next wave of crypto-focused investment products. As the SEC transitions leadership and the broader crypto market evolves, all eyes remain on whether Litecoin can emerge as the pioneer altcoin for U.S. spot ETF approval.
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FAQs
What sparked renewed hope for a Litecoin ETF?
Canary Capital’s amended S-1 filing with the SEC.
Why is early SEC feedback on the filing significant?
It signals possible progress toward eventual approval.
How could SEC leadership change impact Litecoin’s ETF timeline?
Gary Gensler’s departure and Paul Atkins’s potential appointment could speed or slow approval.
What key step is needed before an ETF can be officially approved?
A 19b-4 filing, is a formal request for a rule change by a self-regulatory organization.
Who are the custodians named in Canary’s proposal for the Litecoin ETF?
Coinbase Custody Trust and BitGo.
