Bloomberg ETF analysts say Litecoin regulatory filings have been acknowledged and the SEC likely views it as a commodity.
Bloomberg exchange-traded fund (ETF) analysts have tipped a 90% chance that the US securities regulator will approve a spot Litecoin ETF before the end of the year.
Bloomberg’s James Seyffart and Eric Balchunas see its chances of being approved in 2025 as higher than other ETFs currently proposed, including a spot XRP, Solana and Dogecoin ETF — which they see as having a 65%, 70% and 75% chance respectively.
Litecoin, which was created as a faster alternative to Bitcoin in 2011, shares a similar proof-of-work consensus mechanism to Bitcoin.
Posting on X, the pair said that Litecoin’s path toward SEC approval may be the most straightforward as S-1 and 19b-4 forms have already been filed and acknowledged, while the SEC also likely views it as a commodity.
The race for more crypto ETFs follows strong demand from the spot Bitcoin and Ether
ETH ETFs, which have chalked up $40.7 billion and $3.18 billion worth of net inflows since launching in January and July 2024, respectively, Farside Investors data shows.
While Seyffart doesn’t think a Litecoin ETF would attract that much demand, he said it could still be worthwhile for fund companies with as little as $50 million in some cases.
“They don’t have to hit it out of the park on a flows basis to be worthwhile from an issuer perspective,” Seyffart told Cointelegraph.
Expect to see more crypto ETF filings
Seyffart said more crypto ETFs could be proposed, too, predicting US-based ETF issuers to follow a “spaghetti cannon approach.”
“Issuers will try to launch many many different things and see what sticks,” Seyffart said.
Balchunas noted that the odds for all of these crypto ETFs — except Litecoin — were below 5% before US President Donald Trump won the US election on Nov. 5, 2024.
Regulatory work still needs to be done with XRP, Solana
Meanwhile, questions remain over Solana and XRP’s security status, with Seyffart predicting that an XRP ETF wouldn’t be approved until the SEC’s lawsuit against Ripple is fully resolved.
Ripple scored a partial victory in August 2023, when it was ruled that XRP isn’t a security when sold on secondary markets — however, the SEC appealed this court decision, claiming that Ripple breached securities laws when it sold XRP to retail investors.
However, these actions were taken under the Gary Gensler-led SEC, and Ripple is now hoping that the new SEC leadership, currently led by acting chair Mark Uyeda, will withdraw the enforcement case.
The security status of Solana will also need to be resolved before the SEC can analyze Solana under a “commodities ETF wrapper,” Seyffart said last month.