Litecoin ETF Could Be Next After Bitcoin and Ethereum – SEC Decision Looms

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Bloomberg ETF analysts James Seyffart and Eric Balchunas have assigned a 90% probability that the US Securities and Exchange Commission (SEC) will approve a spot Litecoin ETF (Exchange-traded fund) before the end of 2025.

Strong Case for Litecoin ETF Approval

According to Seyffart and Balchunas, a Litecoin ETF has the highest chance of approval among the currently proposed cryptocurrency ETFs, including Solana (SOL), XRP (XRP), and Dogecoin (DOGE). Their estimated approval probabilities are 70%, 65%, and 75%, respectively.

Also read: Understanding Litecoin Core: A Comprehensive Guide

The analysts highlighted that Litecoin’s proof-of-work (PoW) consensus mechanism, which mirrors Bitcoin’s (BTC) structure, gives it a significant advantage. Unlike XRP and Solana, which still face regulatory uncertainty over their classification as securities, Litecoin is widely considered a commodity—a critical factor that makes SEC approval more likely.

SEC’s Decision Timeline and Market Expectations

The SEC is set to decide on the Litecoin, Solana, XRP, and Dogecoin ETFs between Oct. 2 and Oct. 18, 2025. If approved, a Litecoin ETF could launch before the final deadline, according to Seyffart.

Also read: Litecoin Mining Machines: Top Picks for Profitability

The push for more crypto ETFs follows the massive success of spot Bitcoin and Ether ETFs, which have collectively attracted over $43.88 billion in net inflows since their respective launches in January and July 2024.

While a Litecoin ETF may not generate the same level of demand as Bitcoin or Ethereum, Seyffart believes it could still be worthwhile for fund issuers, even with as little as $50 million in assets under management.

Regulatory Hurdles for Solana and XRP ETFs

While Litecoin’s approval seems increasingly likely, Solana and XRP ETFs face regulatory challenges. Seyffart noted that the SEC’s ongoing lawsuit against Ripple remains a significant roadblock for an XRP ETF approval. Although a 2023 ruling declared that XRP is not a security when sold on secondary markets, the SEC has appealed the decision, complicating the approval process.

Also read: Litecoin X Account Hacked to Promote Fraudulent Token

Similarly, the classification of Solana as a security or commodity remains uncertain. Until this issue is resolved, Solana’s chances of ETF approval remain lower than Litecoin’s.

Crypto ETFs Are Just Getting Started

With growing interest in crypto ETFs, the analysts anticipate more ETF filings in the coming months. Seyffart described the strategy as a “spaghetti cannon approach,” where issuers will launch multiple crypto-based ETFs to see which gain traction.

Meanwhile, political and regulatory shifts are also shaping the landscape. Before the US presidential election on Nov. 5, 2024, analysts had assigned less than a 5% probability to most crypto ETFs besides Bitcoin and Ethereum. However, Trump’s election victory has dramatically shifted sentiment, with greater optimism now surrounding the approval of additional crypto ETFs.

Author

Steven Walgenbach

Steven's passion for cryptocurrency and blockchain technology began in 2014, inspiring him to immerse himself in the field. He notably secured a top 5 world ranking in robotics. While he initially pursued a computer science degree at the University of Texas at Arlington, he chose to pause his studies after two semesters to take a more hands-on approach in advancing cryptocurrency technology. During this period, he actively worked on multiple patents related to cryptocurrency and blockchain. Additionally, Steven has explored various areas of the financial sector, including banking and financial markets, developing prototypes such as fully autonomous trading bots and intuitive interfaces that streamline blockchain integration, among other innovations.

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