By Michael Scott
The US Security and Exchange Commission (SEC) issued a 21-day window for public commentary toward Canary Capital’s application to issue Litecoin ETF.
- The invitation for public comments is a critical milestone for any Litecoin ETF filing.
- The LTC exchange-traded fund (ETF) plans to track the CoinDesk Litecoin Price Index (LTX) while using cash-only for share creation and redemption.
- Litecoin has staged a 15.1% intraday uptick to change hands at $129.37 following the SEC announcement.
- Besides Canary Capital, other applicants for the Litecoin ETF include CoinShares and Grayscale.
- The pursuit for Litecoin ETF emerges from the Bitcoin ETFs and Ethereum ETFs following their debut in January and May 2024.
The US Securities and Exchange Commission (SEC) commenced a review of the proposal by Canary Capital to issue the Litecoin exchange-traded fund (ETF). The move by the SEC to open the 21 days for public comments emerges after Nasdaq’s filing to represent the initial altcoin ETF bid to attain this regulatory process phase.
Progress in Litecoin ETF Journey
Reflecting on the Litecoin ETF journey reveals Nasdaq submission on Jan. 15 via a 19b-4 filing. This presents the second stage of the crypto ETF approval process. The filing showed that the Nasdaq exchange is the designated listing venue for the investment product.
Canary Capital elaborated on the plan for its Litecoin ETF product to track the Litecoin Price Index (LTX) by CoinDesk. The Litecoin ETF will also utilize the cash-only system for share creation and redemption. Implementing this structure will facilitate investors’ exposure to LTC via their standard brokerage accounts, eliminating direct crypto management.
Senior ETF analyst from Bloomberg, Eric Balchunas, labelled the filing progress on an X update. He observed that the public comment stage signals progress in the application, satisfying regulatory requirements. Despite this achievement, it is uncertain whether the securities watchdog would align with the 240-day review window or embrace a faster approval timeline.
The crypto market responded positively to Litecoin ETF development news, with the underlying asset surging by 15.1% in the past 24 hours and 24.5% in the past month to $129.37 per CoinGecko data.
The positive sentiment saw Litecoin maintain upward momentum, with its trading volume up by 253.41% to $1.8 billion in the past 24 hours. Similarly, open interest in Litecoin increased, suggesting growing market participation as community sentiment is bullish and a possibility for further gains. A look into the technical chart shows a falling wedge pattern hinting at further upward movement in price.
Crypto ETF Applications Wave
The proposal by Canary Capital forms part of the broader wave of crypto ETF bids. Among them is CoinShares, which confirmed filing an S-1 form for its Litecoin ETF, while Grayscale tabled a bid to convert the Litecoin Trust into an exchange-traded fund. The interest in LTC ETF follows the exemplary performance of spot BTC and ETH ETFs in their debut year.
The bid for LTC ETF features a proposed structure, a comprehensive custody framework that features specialised financial entities identified as Authorized Participants. The parties are identified as broker-dealers who handle the creation and redemption of the LTC ETF shares via cash transactions. This will save investors from directly dealing with the crypto.
The advanced phase of LTC ETF application by Canary Capital emerged after self-regulatory entities such as Nasdaq submitted rule changes with the regulator. This complies with the Exchange Act Rule 19b-4 provision to guarantee transparency and investor protection via public disclosure.
Why This Matter
A look at the daily charts shows growing optimism about the SEC’s approval of the crypto ETFs. The underlying assets led by Litecoin, whose Relative Strength Index (RSI) hit 53.83, suggesting upward momentum. This coincides with the MACD displaying the bullish crossover,r leaving $140 and $160 potential targets if LTC sustains the upward trend.
The spike in the trading volume indicates heightened market participation following the news, with the community anticipating approval. The optimism emerges from the acting SEC chair Mark Uyeda, alongside Commissioner Hester Peirce, who is now heading the crypto task force likely to approve the LTC ETF.
Nonetheless, the SEC would still consider the submissions from investors and market participants conveying their views during the public comment period on Litecoin ETF.