US SEC acknowledges CoinShares filing for Litecoin ETF

The US Securities and Exchange Commission acknowledged the filing from The Nasdaq Stock Market LLC on behalf of the CoinShares Litecoin ETF. Even before the news of the filing, LTC rallied ahead of other coins. 

The US Securities and Exchange Commission filed an acknowledgment of the filing for the CoinShares Litecoin ETF. The document’s publication followed the rules change proposals from February 7, when Nasdaq Stock Market LLC filed its intent to trade shares of the Litecoin ETF. The launch of the new investment vehicle is seen as highly probable, especially after completing one more procedural step.  

The recent rule change proposals are now open to discussion for interested counterparties. Litecoin is a widely adopted network, with mainstream investment opportunities by Grayscale. However, a full ETF is expected to lift the coin out of its long-term sideways trading, to break out to a new all-time high. The discussion period of 21 days after the acknowledgment may attract more attention to an already highly active LTC market action, with expectations of a bigger breakout.

CoinShares will re-evaluate its Trust daily, based on the Compass Crypto Reference Index Litecoin at 4pm NY Time. All assets of the CoinShares ETF will be held by a Delaware Statutory Trust, formed on December 10, 2024. The Trust will hold LTC passively, and not attempt any trading or risk strategies. Because it is passive, the Trust is also not registered under the Investment Company Act of 1940.

The Trust will redeem shares in baskets of 5,000, each share containing an allocation of LTC. The Trust will not trade or use LTC to receive additional passive income, and will not hold any incidental assets, including airdrops. 

Nasdaq will deem the Shares of the ETF to be equity securities, subject to the exchange’s listing and trading rules. The Litecoin ETF shares will trade from 4:00 AM to 8:00 PM Eastern Time. 

Can LTC return as a top 10 crypto?

Following the news of the next step in the ETF procedure, LTC rallied ahead of all other assets. LTC expanded to $136.56, gaining over 11% in the past day. 

Compared to other breakouts, LTC is still posting modest gains. However, the coin has been on an expansion trend, gaining attention along with other ‘dinosaur’ coins. LTC may attract interest as the meme token narrative wears out and investors are seeking other trending assets. Miners also have new mining rigs available and may continue to compete for more LTC as a source of higher rewards and potential active appreciation. 

Based on miner activity, LTC has gained significant trust from miners. Since January 2024, the Litecoin hashrate has tripled, making the chain far more secure. LTC carries around 200K transactions per day and is mostly used as a payment tool. The network offers confidentiality features, which need to be switched off when interacting with centralized exchanges. 

In the past, LTC has been in the top 5 of coins and tokens. The current bull market has sparked suggestions of LTC rising as high as $1,000. However, the most recent bull market failed to raise the price of much more usable networks. 

Litecoin does not allow tokenization, though it briefly had a period of creating new coins to be co-mined in each block. After the news of Litecoin’s rally, DOGE also recovered, rising above $0.25. DOGE is the main asset co-produced in Litecoin blocks.

In the short term, LTC may re-enter the top 10 coins and tokens, if it doubles its price to around $270.

LTC is held in relatively old wallets, which include Grayscale’s investment products. The fund holds 2.04M LTC out of a circulating supply of 75.5M. Similar to the Ethereum (ETH) investment product, Grayscale may initially become a source of selling, pressuring the LTC price. Grayscale’s LTC product trades at $12.53 per share, a discount to the current market price of LTC. Grayscale’s products have previously traded with a similar discount, reflecting the relatively low mainstream interest in the shares.

Cryptopolitan Academy: How to Write a Web3 Resume That Lands Interviews - FREE Cheat Sheet