Litecoin Price Falters Amid Doubts Over LTC ETF Approval

When the US Securities and Exchange Commission (SEC) approved the 11 initial applications for spot ETFs last January 2024, it signaled a favorable environment for Bitcoin. The top digital assets price surged thanks to increasing institutional attention. So, it isnt surprising that other top crypto projects follow suit, with Litecoin (LTC), a proof-of-work coin, on the deciding table.

However, Litecoin is having a rough start to the year. Its currently trading at $94.89, down 22% in the last 30 days. Litecoins price performance this week aligns with other altcoins, which surrendered some of their gains last year.

Also, crypto analysts attribute Litecoins slide to the diminishing odds that spot LTC ETFs will be approved in 2025. According to Polymarkets tracking, the odds of approving the spot LTC ETFs this year dipped to 24% as of January 13th.

Odds Of Spot ETFs For Litecoin Continue To Drop

For months, the crypto industry and betting markets have been projecting the odds of finally having these spot Litecoin ETFs. On December 19th, the Polymarket odds put the chances at 75% before starting to dip as the year closed. The odds were close to 50% at the start of the year, but this soon began to taper, and its now at 24%.

However, some crypto analysts are optimistic that these ETFs will be approved soon. Eric Balchunas, a Bloomberg analyst, shared his optimism in a post. He explained that the SEC would approve these funds since they are a fork of Bitcoin.

A Wave Of Crypto ETFs Soon?

According to Bloombergs Balchunas, the market is ready to welcome the approval of new spot ETFs for different coins. In his Twitter/X post shared on December 18th, he said that the Bitcoin and Ether ETF combo may be approved, and theres a probability that Litecoins ETFs may be next. He argued that since Litecoin is Bitcoins fork, it will be easier for proponents to gain approval.

In addition to Litecoin, Balchunas also predicted that HBAR may be next since its not identified as a security, followed by XRP/Solana. However, XRP has the lowest odds of being approved since it has a pending lawsuit over its securities labelling.

Whats Ahead For Spot Litecoin ETFs

Canary Capital was the only company to file an application for Litecoins ETF. Analysts also expect Grayscale to follow suit if it decides to convert its Litecoin Trust, which boasts over $215 million in assets.

Some experts say that the spot ETFs for Litecoin may have an uncertain future even if it gains SEC approval. Some say that its questionable whether institutional investors will pick these investments. Even Bitcoin and Ethers spot ETF performances are relatively weak. For example, Bitcoin funds are backed by $107 billion in assets, representing just 5.7% of the total coins market cap.

Ethereum, on the other hand, boasts $11.6 billion, just 2.96% of the total assets market cap. Since Litecoin is a smaller cryptocurrency project, many analysts dont expect much from the spot LTC ETFs.

Featured image from Pexels, chart from TradingView

Text source: NewsBTC

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