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Following the approvals of spot Bitcoin and Ethereum exchange-traded funds (ETF) in the U.S. in 2024, there is growing expectation that the U.S. Securities and Exchange Commission (SEC) will greenlight more spot crypto ETFs in 2025.
Payment-focused Litecoin (LTC) is seen as the next cryptocurrency likely to receive SEC approval for a spot ETF in the U.S
Bloomberg ETF analysts James Seyffart and Eric Balchunas estimate a 90% chance of the U.S. SEC approving a spot Litecoin ETF as of February 11, 2025.
In comparison, the odds for spot crypto ETFs for Solana (SOL), Ripple (XRP), and Dogecoin (DOGE) are lower.
Techopedia explores the spot Litecoin ETF rumors and studies how cryptocurrency prices have reacted to spot ETF listings.
Key Takeaways
- Bloomberg analysts say Litecoin is the top contender for a spot ETF in 2025.
- The SEC’s main concern is fraud detection and market surveillance.
- Nasdaq applied to list the Canary Litecoin ETF in January 2025.
- Bitcoin soared after its ETF approval, but Ethereum’s ETF struggled.
- The SEC has up to 90 days to decide on Litecoin’s ETF application.
Will We See a Spot Litecoin ETF in 2025?
The presence of a system to detect and prevent fraud and manipulation of spot crypto ETFs is a key criterion placed by the U.S. SEC when approving such ETF listings.
For spot Bitcoin and Ether ETFs, the U.S. SEC concluded that fraud or manipulation in spot crypto markets could be detected by examining the “consistently high” correlation between futures markets on the Chicago Mercantile Exchange (CME) and spot prices.
The U.S. SEC said:
“Based on the record before the Commission and the improved quality of the correlation analysis in the record, including the Commission’s own analysis, the Commission is able to conclude that fraud or manipulation that impacts prices in spot Bitcoin markets would likely similarly impact CME Bitcoin futures prices.
“And because the CME’s surveillance can assist in detecting those impacts on CME Bitcoin futures prices, the Exchanges’ comprehensive surveillance-sharing agreement with the CME … can be reasonably expected to assist in surveilling for fraudulent and manipulative acts and practices.”
In late January 2025, when the Nasdaq Stock Exchange applied to list and trade shares of the Canary Litecoin ETF, the exchange disclosed that it had a surveillance-sharing agreement with Coinbase Derivatives through its membership in the Intermarket Surveillance Group (ISG).
“Similar to the Spot Bitcoin and Spot ETH ETPs previously approved by the SEC, Nasdaq’s ability to obtain information regarding trading in the LTC futures from other markets that are members of the ISG (specifically Coinbase Derivatives) would assist Nasdaq in detecting and deterring misconduct,” said the Nasdaq Stock Exchange.
It remains to be seen whether the SEC will view the Coinbase Derivatives exchange in the same light as the CME. As of February 2025, the CME has only listed crypto derivative products for Bitcoin and Ethereum.
In Techopedia’s analysis on spot Solana ETFs, we mentioned the lack of Solana futures trading on CME as a major deterrent to spot SOL ETF hopes.
Techopedia also noted that the SEC had used a 31-month sample period between October 2021 and March 2024 to examine the correlation between Ether futures prices and spot ETH prices.
Even if Litecoin or Solana futures contacts were to get listed on the CME today, it would take about three years to record market data as deep as the set used when the SEC discussed the approval of spot ETH ETFs.
The SEC has up to 45 days to respond to Nasdaq’s spot Litecoin ETF application filed on January 29, 2025. The regulator can extend the deadline to 90 days if needed to approve, deny, or take the discussions further.
NEW: @EricBalchunas and I took a look at the filings for spot crypto ETFs. We're putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now.
Here's the table with the odds and some other details: pic.twitter.com/xaXaNXLb0M
— James Seyffart (@JSeyff) February 10, 2025
How Have Spot Crypto ETFs Affected Cryptocurrency Prices?
Bloomberg analysts are predicting Litecoin to be the first cryptocurrency to receive a spot crypto ETF listing in 2025. How have cryptocurrency prices reacted to spot ETF listings in the past?
Spot Bitcoin ETFs Sent BTC Prices to All-time Highs
The approval of spot Bitcoin ETFs in January 2024 was a watershed moment for the cryptocurrency industry. It was the moment when Bitcoin was finally recognized as a legitimate investment class.
Spot BTC ETFs have enabled stock market investors, corporations, and institutions to gain exposure to the premier cryptocurrency safely and conveniently.
When the spot BTC ETFs were approved on January 10, 2024, BTC was trading at over $46,000.
Spot Bitcoin ETFs were so popular that Blackrock’s iShares Bitcoin Trust (IBIT) became the ninth most successful ETF launched of the past decade (2014-2024) with a peak asset under management valuation of about $24 billion, data compiled by CFRA showed.
The spot Bitcoin ETF achieved this feat in less than nine months of trading.
CFRA said that IBIT tapped into the “latent demand for a spot Bitcoin ETF, which existed because prior crypto investment options like futures-based crypto ETPs and closed-end fund structures had drawbacks.”
It was no surprise to see BTC scale multiple all-time high peaks in 2024. The bellwether Bitcoin eventually peaked at $109,114 on January 20, 2025, about 137% higher than its pre-spot BTC ETF price.
Spot Ether ETFs Fail to Kickstart ETH Bull Market
ETH’s price performance in 2024 showed crypto investors that spot crypto ETFs do not guarantee that the underlying asset will surge in price.
Before the spot ETH ETFs were approved by the U.S. SEC on July 24, 2024, ETH closed at about $3,440.
Fast forward to February 2025, ETH prices were trading at about $2,650, about 25% below pre-spot-ETF prices, contrary to beliefs that spot crypto ETF will more or less result in price appreciation.
The low demand for spot ETH ETFs relative to spot BTC ETFs is the result of bearishness related to Ethereum’s rollup-centric scaling roadmap which has led to new network issues such as liquidity fragmentation and poor user experience.
Additionally, rival L1 blockchains such as Solana and Tron (TRX) have also eaten into Ethereum’s market share and diversified investor attention.
This is a cautionary tale for Litecoin investors who may see a spot LTC ETF approval as the catalyst to a Litecoin bull run.
However, the investing market is more complicated than that and takes into account several other factors related to technological innovation, adoption rates, blockchain use cases, and future outlook.
Is Speculation Driving Litecoin’s Price?
Let’s talk about Litecoin in detail and learn more about how the payment-focused cryptocurrency has fared in the lead-up to a potential spot LTC ETF listing.
Litecoin was created in October 2011 by Charlie Lee as a fork of the Bitcoin blockchain. Created as a “lite version of Bitcoin,” its aim was offering faster block times, higher network throughputs, and lower fees.
Litecoin supporters are hoping that the crypto project’s close association with Bitcoin and its existence lasting well over a decade will help LTC in its spot ETF application with the U.S. SEC.
The Nasdaq Stock Exchange has leaned on Litecoin’s close association with Bitcoin in its spot LTC ETF listing application, calling the proposed listing derivative a “commodity-based trust shares.”
Note that former SEC chair Gary Gensler only recognized Bitcoin as a commodity among all crypto assets.
The LTC token price performance over the last 90 days, as of February 11, 2025, indicates that the cryptocurrency is benefiting from the spot LTC ETF speculation.
In this period, LTC has gained about 67%, outperforming the likes of Bitcoin (+6.6%) and Ethereum (-19%).
Fellow spot ETF hopefuls Solana and Dogecoin have lost about 6% and 37%, respectively, in the period. XRP outperformed LTC with a gain of over 250%, over the last 90 days as of February 11, 2025, on positive developments regarding its SEC lawsuit.
LTC’s all-time high stands at about $412 hit in May 2021. At the time of writing, LTC was trading about 69% below its record-high level.
Following a Litecoin bear market that saw the token bottom at about $40 in June 2022, the cryptocurrency has bounced back to trade at about $125 supported by a privacy-focused upgrade called Mimblewimble Extension Blocks (MWEB) in 2022 and Litecoin halving event in 2023.
The Bottom Line
The approval for the spot Litecoin ETF is far from guaranteed despite Bloomberg analysts’ projections that LTC is the most likely cryptocurrency to secure a spot ETF in 2025.
The SEC’s historical reliance on CME futures data could present a roadblock and question regulators whether Coinbase Derivatives can meet the same standard.
For Litecoin investors, the mixed impact of past spot ETF approvals on cryptocurrency prices is a key insight. Investors have to consider broader market conditions before speculating on a potential Litecoin rally.
FAQs
When will the Spot Litecoin ETF be approved?
What is a Spot Litecoin ETF?
How does a Spot Litecoin ETF compare to Bitcoin and Ethereum ETFs?
Why is Nasdaq’s surveillance-sharing agreement with Coinbase important?
What factors could delay or prevent a Spot Litecoin ETF approval?
Could a Spot Litecoin ETF boost LTC prices?
References
- Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Changes To List and Trade Shares of the Grayscale Ethereum Mini Trust and ProShares Ethereum ETF (Federal Register)
- Self-Regulatory Organizations; NYSE Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.; Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units (SEC)
- Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change to List and Trade Shares of the Canary Litecoin ETF under Nasdaq Rule 5711(d) (SEC)
- James Seyffart on X (X)
- Identifying the Most Successful U.S. ETF Launches of
the Past Decade (CFRA Research)
