Litecoin's first spot ETF filed by Canary Capital

• Asset manager Canary Capital filed Litecoin’s first ETF with the US SEC on Tuesday.
• According to the filings, Canary’s proposed ETF aims to hold spot LTC and closely track the CoinDesk Litecoin Price Index (LTX) performance.
• If approved, the ETF will provide consumer and institutional investors with widespread direct exposure to LTC.

Litecoin (LTC) continued its upward momentum, trading above $71 on Wednesday, building on a 6% surge from Tuesday. This rally was fueled by the announcement that Canary Capital had filed for its first LTC spot Exchange Traded Fund (ETF) with the US Securities and Exchange Commission (SEC), marking a significant positive development for the cryptocurrency. 

Canary Capital files for first Litecoin spot ETF with US SEC

On Tuesday, Canary Capital officially filed for the first LTC spot ETF with the US SEC. With guidance from Canary’s CEO, Steven McClurg, the former co-founder and Chief Investment Officer of Valkyrie Funds, the issuers of the Coinshares Valkyrie Bitcoin Fund ETF, Steven established Canary Capital to drive innovation and deliver actively managed private strategies to meet institutional demand for sophisticated cryptocurrency investment solutions.

Canary Capital has filed the first Form S-1 for a LTC ETF with the U.S. Securities and Exchange Commission (SEC). If approved, the ETF will provide both consumer and institutional investors with wide-spread direct exposure to #Litecoin ‘ $LTC ’ ⚡️https://t.co/ob3heK7dFS pic.twitter.com/IfjcdCPle6

— Litecoin Foundation ⚡️ (@LTCFoundation) October 15, 2024

According to the filings, Canary’s proposed ETF aims to hold spot LTC and closely track the performance of the CoinDesk Litecoin Price Index (LTX).

ETF fillings by big investment companies are generally positive signs for Litecoin in the long term, as an ETF can make it easier for traditional investors to gain exposure to LTC without needing to purchase and store the cryptocurrency directly. Moreover, approving an ETF could lend more legitimacy to LTC and increase liquidity.

Crypto ETF FAQs

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.

Is Bitcoin futures ETF approved?

Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.

Which are the pros and cons of crypto ETFs?

The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.