Litecoin (LTC) Leading The Pack for Next Crypto ETF: 90% Chance of Approval

TLDR:

• Bloomberg analysts predict 90% approval chance for Litecoin ETF by end of 2025, higher than XRP (65%), Solana (70%), and Dogecoin (75%) ETFs
• SEC has acknowledged Litecoin’s regulatory filings, and analysts believe it will be classified as a commodity like Bitcoin
• Current Bitcoin and Ethereum ETFs have attracted $40.7 billion and $3.18 billion in net inflows since their launches
• More crypto ETF filings are expected from US-based issuers following a “spaghetti cannon approach”
• XRP and Solana ETF approvals face additional hurdles due to ongoing security status questions

Bloomberg ETF analysts have given the Litecoin exchange-traded fund (ETF) a 90% chance of receiving SEC approval before the end of 2025, placing it ahead of other cryptocurrency ETF candidates. The assessment comes from Bloomberg’s James Seyffart and Eric Balchunas, who evaluated multiple crypto ETF proposals currently under review.

Our official alt coin ETF approval odds are out. Litecoin leads w 90% chance, then Doge, followed by Solana and XRP. We are only doing for 33 Act $IBIT-esque filings. But def poss to see futures or Cayman-subsidiary type 40 Act stuff get through as well. https://t.co/JSaNnifjbu

— Eric Balchunas (@EricBalchunas) February 10, 2025

According to their analysis, other cryptocurrency ETFs show lower approval probabilities. The analysts estimate a 75% chance for Dogecoin ETF approval, 70% for Solana, and 65% for XRP. These odds represent a major shift from earlier predictions, as most of these proposals had less than 5% chance of approval before recent regulatory developments.

The strong performance of existing cryptocurrency ETFs has sparked interest in expanding the market. Since their launches, Bitcoin ETFs have attracted $40.7 billion in net inflows, while Ethereum ETFs have drawn $3.18 billion, according to data from Farside Investors.

Litecoin’s high approval odds stem from several factors. The cryptocurrency, created in 2011 as a faster alternative to Bitcoin, shares similar technical characteristics with Bitcoin, including its proof-of-work consensus mechanism. The SEC has already acknowledged Litecoin’s regulatory filings, including both S-1 and 19b-4 forms.

Seyffart believes that while a Litecoin ETF might not generate the same level of investor interest as Bitcoin or Ethereum funds, it could still be profitable for fund companies. He suggests that even $50 million in assets under management could make these products worthwhile for issuers.

SEC Lawsuit

The regulatory landscape for other cryptocurrencies presents additional challenges. XRP faces ongoing legal uncertainty, with analysts suggesting that ETF approval might have to wait until the SEC’s lawsuit against Ripple reaches a complete resolution. While Ripple won a partial victory in August 2023 regarding XRP’s status in secondary market sales, the SEC has appealed this decision.

Solana’s path to ETF approval also faces hurdles due to questions about its security status. According to Seyffart, these issues need resolution before the SEC can evaluate Solana under a commodities ETF framework.

The timeline for these decisions is becoming clearer. The final deadline for the SEC to rule on Litecoin, Solana, XRP, and Dogecoin ETFs falls between October 2 and October 18, according to Seyffart’s analysis. However, he notes that a Litecoin ETF could potentially launch before these deadlines.

New entrants continue to join the race. Canary Capital and 21Shares have filed ETF proposals for Hedera and Polkadot, though analysts have not yet assigned approval probabilities to these applications.

The market may see even more crypto ETF proposals in the coming months. Seyffart predicts US-based ETF issuers will adopt what he calls a “spaghetti cannon approach,” filing multiple applications to see which ones succeed.

Commissioner Hester Peirce’s Crypto Task Force may review the SEC’s classification of XRP and Solana as securities by the end of 2025, potentially affecting their ETF approval odds.

Both XRP and Dogecoin ETF filings are expected to receive SEC acknowledgment soon, according to Seyffart’s latest updates.

The current administration’s approach to cryptocurrency regulation appears more favorable than previous ones, potentially creating opportunities for new crypto investment products.

Fund structure variations may emerge beyond traditional ETFs. Balchunas notes that while their analysis focuses on 1933 Act filings, similar to BlackRock’s IBIT Bitcoin ETF, alternative structures such as 40 Act futures-based ETFs or Cayman-subsidiary funds could also enter the market.

Current data from Farside Investors shows the success of existing crypto ETFs, with Bitcoin and Ethereum products demonstrating strong market demand since their launches in January and July 2024.