When the US Securities and Exchange Commission (SEC) approved the initial 11 applications for spot ETFs in January 2024, it signaled a favorable environment for Bitcoin. The price of the leading digital asset rose due to increased institutional attention. Therefore, it is not surprising that other major crypto projects are following suit, with Litecoin (LTC), a proof-of-work coin, on the decision table.
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However, Litecoin is off to a great start to the year. today stands at 94.89 $. down 22% in the last 30 days. Litecoin's price performance this week aligns with other altcoins, which surrendered some of their gains last year.
Also, crypto analysts attribute Litecoin's slide to the reduced numbers that see LTC ETFs approved in 2025. According to Polymarket's trackingthe chance to approve the spot LTC ETFs this year was down to 24% as of January 13th.
The Spots exchange rate is going down against Litecoin
For months, the crypto industry and securities markets have been looking at the possibilities of finally getting these spot Litecoin ETFs. On 19 December, the Polymarket odds put the odds at 75% before starting to decline as the year closed. The chance was close to 50% at the beginning of the year, but this soon started to get worse, and is now at 24%.
However, some crypto analysts are optimistic that they will ETFs will be approved soon. Eric Balchunas, a Bloomberg analyst, shared his hope in a post. He explained that the SEC would approve these funds because they are a fork of Bitcoin.
A Wave of Crypto ETFs Soon?
According to Bloomberg's Balchunas, the market is ready to welcome a new spot ETF agreement for various coins. In his Twitter/X post shared on December 18, he said that the Bitcoin and Ether ETF combo could be approved, and it looks like a Litecoin ETF could be next. He argued that since Litecoin is a fork of Bitcoin, it will be easier for bidders to get approval.
In addition to Litecoin, Balchunas also predicted that HBAR may be next because it is not classified as a security, followed by XRP/Solana. But, XRP has the lowest approval rating because it has a pending securities filings lawsuit.
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What's Ahead for Spot Litecoin ETFs
Canary Capital was the only company to apply for Litecoin's ETF. Analysts also expect Grayscale to follow suit if they decide to spin off their Litecoin Trust, which has more than $215 million in assets.
Some experts say that the spot ETFs for Litecoin may have an uncertain future even if it gets SEC approval. Some say it is doubtful that institutional investors will choose these investments. Even Bitcoin and Ether spot ETF performances relatively weak. For example, Bitcoin assets are backed by $107 billion in assets, representing just 5.7% of the coin's total market cap.
Ethereum, on the other hand, has $11.6 billion, just 2.96% of the total asset market cap. Since Litecoin is a smaller cryptocurrency project, many analysts do not expect much from the spot LTC ETFs.
Featured image from Pexels, chart from TradingView
