Key Takeaways
The crypto market’s rapid expansion has created diverse investment options.
Exchange-traded funds (ETFs) are one type; they offer simplified access to digital assets. After the SEC approved Bitcoin and Ethereum ETFs in 2024, Litecoin ETFs are now on the horizon.
But is there a Litecoin ETF already?
No, the Litecoin ETF has not been approved yet. On Jan. 15, Canary Capital filed an amended Litecoin ETF application with the Securities and Exchange Commission (SEC), fueling hopes for broader adoption. Key developments signal progress, as Canary Capital’s spot Litecoin ETF filing has entered the review phase, while Grayscale seeks to convert its Litecoin Trust into an ETF. These moves could enhance Litecoin’s market accessibility, though approval remains uncertain.
Investors often call Litecoin ‘silver to Bitcoin’s gold.’ Launched in 2011, this peer-to-peer cryptocurrency offers faster transactions and a different hashing algorithm than Bitcoin. Its quicker block times make it a key player in the crypto space.
This article explains Litecoin ETFs, detailing how they work and what they mean for the crypto ecosystem.
Recent developments indicate growing momentum in cryptocurrency ETFs. On January 29, 2025, the SEC acknowledged Canary Capital’s 19b-4 filing for a spot Litecoin ETF, making it the first altcoin ETF to reach this stage. This acknowledgment starts a 240-day review period for approval or rejection.
Additionally, Grayscale Investments seeks to convert its Grayscale Litecoin Trust (GLTC) into a spot ETF, aiming to provide regulated exposure to Litecoin. On February 6, 2025, the SEC accepted Grayscale’s application for review, marking another key step in the process.
These filings show the SEC’s growing engagement with crypto investment products beyond Bitcoin and Ethereum, aligning with institutional interest in diversified crypto assets. However, it is important to note that the review process remains extensive, and approval is not guaranteed.
A Litecoin ETF is a type of investment that aims to expose investors to the price movements of Litecoin (LTC) by holding it as an asset or replicating its value through derivatives. It allows investors to track LTC price movement without requiring them to directly own, store, or manage the cryptocurrency.
Investors trade ETFs on stock exchanges as shares. For Litecoin ETFs, this involves mirroring the cryptocurrency’s performance.
Unlike holding Litecoin directly, an ETF removes the complexities of managing wallets or private keys, offering a more straightforward investment method.
ETFs, in general, offer the following benefits:
ETFs function by tracking an underlying asset or index. In the case of Litecoin ETFs, the ETF provider (for example, Canary Capital if their application is approved) would purchase and hold a certain amount of LTC and then issue shares representing ownership of a portion of those holdings.
These shares are then traded on stock exchanges, making them as easily accessible as traditional stocks for retail and institutional investors.
The ETF’s share price aims to mirror the price fluctuations of Litecoin closely.
Market makers, such as trading firms or banks, play a crucial role in ensuring this price alignment. They are financial firms that facilitate trading by continuously buying and selling ETF shares, creating liquidity, and keeping the ETF’s price close to its net asset value (NAV).
The NAV represents the total value of the Litecoin held by the fund, the Litecoin ETF, minus expenses, divided by the number of outstanding shares of that specific ETF.
There are two main types:
The industry has expressed its hopes for a positive outcome.
ETF can offer a range of benefits to investors that, in the case of Litecoin, can potentially be:
However, the benefits of a Litecoin ETF come also with the following challenges:
Litecoin ETFs could make it easier for people to invest in Litecoin. These funds try to match the price of Litecoin, offering a more regulated way to invest than buying Litecoin directly.
However, there are also some downsides. Prices can change quickly, and the funds might not perfectly track Litecoin’s price.
Also, it is not certain if regulators will approve these funds. The recent application for a Litecoin ETF has increased interest, but it is important to remember that approval is not guaranteed.
Litecoin ETFs would charge annual expense ratios. These fees aim to cover management and operations and reduce investors’ returns. If regulators approve them, all investors with brokerage accounts, not just accredited investors, can buy Litecoin ETFs on public exchanges. Litecoin ETFs trade like stocks on exchanges, offering simpler access than complex futures contracts or differently structured trusts.What are the fees associated with a Litecoin ETF?
Are there any limitations on who can invest in a Litecoin ETF (e.g., accredited investors only)?
What are the differences between a Litecoin ETF and other cryptocurrency investment products, such as futures contracts or trusts?