Nashville-based asset manager Canary Capital has filed an S-1 form for a Litecoin (LTC) exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC). This is the first application for a Litecoin-linked spot ETF in the US and comes less than a week after the asset manager’s XRP ETF filing on Oct. 8. Canary Capital CEO and founder Steven McClurg was previously Valkyrie Investments chief investment officer, having co-founded the asset manager along with Leah Wald.
According to Alex Thorn, head of research at Galaxy Digital, Litecoin is generally considered to have been a “fair launch,” meaning there was no pre-mine or token sale. Additionally, because Litecoin is based on a proof-of-work consensus model, there was no offering of LTC by any entity to public or private investors. Thorn added: “The SEC hasn’t stated its position on the matter, but it’s unlikely that Litecoin could be considered to have been offered as a security since there was no offering at all. Thus, issuers should theoretically have the same pathway to launch spot-based Litecoin ETFs in the United States as they did for Bitcoin.”
Thorn stated that the same cannot be said about spot Solana ETFs since the blockchain is based on a proof-of-stake consensus algorithm and conducted a token sale. Thorn said: “This is why some analysts have suggested that SOL ETF filings are bets on a Trump victory in November, as a change in the SEC’s approach to classifying crypto assets as securities would likely be required before the agency would approve the listing of SOL ETFs.”
According to Bloomberg ETF analyst James Seyffart, ETPs like CoinShares’ LITE in Switzerland and ETC Group’s ELTC in Germany already hold Litecoin. Meanwhile, the US market is currently only tapped by the Grayscale Litecoin Trust (LTCN). According to a CoinShares report, the LTC funds offered in Europe hold $11.5 million in combined assets under management (AUM), which represents less than 10% of the total AUM of Litecoin-related ETPs globally. Meanwhile, LTCN has $127.4 million in AUM, which makes up the remaining 93% of the money invested in Litecoin-related ETPs worldwide.
