Are Altcoin Spot ETFs Coming, Including Solana (SOL) and Litecoin (LTC)? Bloomberg Analysts Comment

The cryptocurrency exchange-traded fund (ETF) market, long dominated by Bitcoin and Ethereum, could soon welcome new contenders as the U.S. Securities and Exchange Commission (SEC) has begun reviewing applications for Solana and Litecoin ETFs.

The SEC on Thursday took the first step in its regulatory review process by considering applications for Grayscale Litecoin Trust and Solana Trust. The approval is particularly significant, according to Bloomberg Intelligence analyst James Seyffart, as the SEC previously rejected similar applications for Solana.

These latest developments have put the SEC on a timeline, with a final decision expected by October 11, Seyffart said.

Analysts have long predicted that crypto investment products would proliferate with the departure of Gary Gensler as SEC chairman and the Trump administration taking over. That shift appears to be taking shape.

Bloomberg Intelligence analyst Eric Balchunas said in a statement:

“Just six weeks ago, the SEC, led by Gensler, told Cboe to withdraw its Solana ETF application. So we are now in new territory.”

But legal hurdles remain. The SEC has previously classified Solana as a security in lawsuits filed against major exchanges, raising regulatory uncertainties for a potential ETF approval.

“The lawsuits and things from the enforcement division have to clear before they can approve a Solana ETF,” Seyffart said.

Despite these issues, market demand for Solana-based ETFs appears strong. JPMorgan analysts predict that a Solana ETF could generate $3 billion to $6 billion in inflows if approved. However, the bank’s analysts predict that altcoin ETFs, including Solana’s, will likely lag behind Bitcoin and Ethereum in terms of adoption.

“Given their altcoin status, they will match, if not underperform, Ethereum ETF expectations,” JPMorgan researchers wrote.

In addition to Solana Trust, the SEC is also considering Grayscale’s Litecoin Trust application. Canary Capital has also proposed a Litecoin ETF that some experts believe could win approval before Solana’s proposal. Unlike Solana, Litecoin is not classified as a security, potentially easing its regulatory path.

“Litecoin ETFs now check all the boxes,” Balchunas said. “With a new SEC sheriff in town, this could be the first altcoin ETF to hit the market.”

*This is not investment advice.