Litecoin ETF in the Works? SEC’s Shocking Move After Gensler’s Exit!

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The US cryptocurrency market is heating up with a flood of new ETF applications in 2025. 

From Solana to Ripple, asset managers like VanEck, ProShares, and others are racing to bring you the next wave of investment opportunities in digital assets. The U.S. SEC is currently reviewing a proposal for the Canary Litecoin ETF, marking a potential step toward approval. This move follows the approval of Bitcoin and Ethereum ETFs, signaling growing regulatory openness to altcoin-based investment products. The SEC has opened a public comment period for feedback on the proposed ETF, which aims to simplify Litecoin investing for mainstream investors.

This massive flow came right after Gensler’s exit which shows institutions are back in action. Is this the start of a regulatory breakthrough? Institutions are gearing up for the next big move—bullish sentiment is through the roof! Let’s get into the details of the first-ever altcoin ETF prospect. 

A New Chapter for Crypto ETFs?

Canary Capital’s Litecoin ETF is the first altcoin ETF filing to be officially reviewed, according to Bloomberg’s Senior ETF analyst Eric Balchunas. If approved, it would let investors buy Litecoin without needing to deal with crypto wallets or security keys. Instead, they could trade it like a regular stock, making Litecoin investing much easier.

First alt coin 19b-4 to be acknowledged, rest were told to withdraw by Genz SEC. Throw in the comments from SEC on the S-1 and this filing is by far the furthest along checking all the boxes. Q now is will this SEC wait the full 240 days or approve more rapidly. Unknown. https://t.co/iXwq9PkLGr

— Eric Balchunas (@EricBalchunas) January 29, 2025

This initiative follows Canary Capital’s previous attempt to launch an XRP-based ETF. Meanwhile, other companies are also pushing for crypto ETFs, including funds for Solana and XRP. Some firms have even proposed ETFs for memecoins linked to Donald Trump and Melania Trump, as interest in crypto investment grows.

SEC’s Changing Leadership and Crypto Outlook

The SEC has been strict on crypto in the past, especially under former Chair Gary Gensler. But now, with Mark Uyeda as the acting Chair and Hester Peirce leading a new crypto task force, things might be changing for betterment. The fact that the SEC is even considering a Litecoin ETF could mean they are becoming more open to crypto investments.

• Also Read :
•   Gensler’s Exit Opens Door for XRP, Solana ETFs, But Litecoin May Lead the Way
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The ETF Approval Process

Nasdaq filed a 19b-4 application for the Canary Litecoin ETF on January 15, marking a crucial phase in the approval process. This filing allows self-regulatory organizations like Nasdaq to propose rule changes for new financial products. The SEC now has up to 240 days to approve or reject the ETF, though some speculate the decision could come sooner.

How the Canary Litecoin ETF Works

The ETF is designed to track the CoinDesk Litecoin Price Index (LTX) and would hold Litecoin through a secure custody framework. Instead of buying Litecoin directly, investors would own shares in the ETF, making it simpler and safer to invest. Special financial firms would handle large purchases and redemptions using cash, keeping things smooth and regulated.

If approved, this Litecoin ETF could be a big step for crypto, making it easier for regular investors to get involved without dealing with the complexities of digital wallets.