SEC Responds to Litecoin ETF Filing as Market Eyes Approval

Eric Balchunas observed the SEC has responded to Litecoin’s S-1.
The SEC’s response suggests a potential Litecoin ETF could be on the way.
History shows the SEC’s response does not guarantee an ETF approval for Litecoin.

Bloomberg’s Senior ETF Analyst, Eric Balchunas, observed that the SEC has responded to Litecoin’s S-1, signaling the possibility of approving the cryptocurrency’s ETF application. Balchunas believes this response makes it more likely that Litecoin will be the next coin to have its ETF application approved.

We had heard chatter that the Litecoin S-1 had gotten comments back from SEC. This looks to confirm that which bodes well for our prediction that Litecoin is most likely to be the next coin approved. All that said, new SEC chair has yet to start and that’s a huge variable. https://t.co/cKFswPwcr0

— Eric Balchunas (@EricBalchunas) January 15, 2025

Balchunas observed this after James Seyffart, a renowned asset manager, highlighted Canary Funds’ filing of an amendment to their Litecoin ETF proposal. Seyffart acknowledged that the amendment doesn’t guarantee approval. But, he thinks it might show that the SEC is reviewing the filing, which could be a step toward approval.

A Step Forward, But Not a Guarantee

Even with this progress, Seyffart clarified that the SEC’s response is just a preliminary step in the approval process. He emphasized that Litecoin still needs to submit a 19b-4 filing. This is a key step that would officially start the ETF approval or denial process.

In the meantime, foremost journalist Eleanor Terrett has downplayed the SEC’s preliminary response, citing a similar occurrence in the past that has yet to lead to an ETF approval. According to Terrett, Solana ETFs went beyond the response stage before the SEC rejected its 19b-4 filing. However, she noted the rejection happened under Gary Gensler, the SEC chair whose time in office is due to expire in a few days. A new leadership at the Commission could revisit the filings and influence a different outcome for LTC, XRP, and SOL.

Litecoin’s Price Performance

Litecoin is one of the first-generation cryptocurrencies but has lagged behind other cryptos in that category, including Bitcoin and Ethereum, in price development. Market observers have questioned the crypto users’ reluctance towards LTC.

Some believe that the cryptocurrency’s poor performance during the last bull run turned traders away. LTC didn’t reach a new all-time high in the previous bull cycle. Meanwhile, Bitcoin and Ethereum quadrupled in value, and many altcoins increased by roughly ten times their initial value.

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