Bitcoin News Today: Shutdown Stalls Altcoin ETFs at Regulatory Finish Line

Canary Capital's proposed spot Litecoin (LTC) and Hedera (HBAR) exchange-traded funds (ETFs) have reached a critical stage, with finalized amendments to their S-1 registration statements submitted to the U.S. Securities and Exchange Commission (SEC). The filings, which include ticker symbols LTCC and HBR along with a 0.95% annual management fee for each fund, signal the products are "at the goal line" for regulatory approval, according to Bloomberg ETF analysts Eric Balchunas and James SeyffartBalchunas, Eric. ^[1]. However, the ongoing U.S. government shutdown has created uncertainty, as the SEC's ability to process applications is limited to a skeleton crew, leaving deadlines for decisions in limboSeyffart, James. ^[2].

The amendments mark a procedural milestone, with ticker symbols and fee disclosures typically the last details updated before an ETF launch. Balchunas noted that while the 95 basis points (bps) fee is higher than the 0.15–0.25% average for Bitcoin spot ETFs, it is "pretty normal" for niche or newly launched asset classesBalchunas, Eric. ^[3]. The fees reflect the costs of infrastructure and custody for altcoins, which are less established than Bitcoin. Analysts anticipate that if the LTC and HBAR ETFs attract significant investor inflows, competitors may introduce lower-fee alternatives to capture market shareSeyffart, James. ^[4].

The SEC's recent adoption of generic listing standards for crypto ETFs has streamlined the approval process, reducing review timelines from 240 days to as few as 75 days under the new frameworkBalchunas, Eric. ^[5]. This shift has expedited evaluations for applicants like Canary, which filed its LTC ETF in January 2025 and its HBAR ETF in February. Despite this, the government shutdown has stalled final decisions, with the SEC's October 2 deadline for the Litecoin ETF and October 29 deadline for the HBAR ETF now uncertainTerrett, Eleanor. ^[6].

The shutdown has broader implications for the crypto ETF landscape. Over 90 applications are pending, including proposals for Solana (SOL), XRP, and other altcoins. While some analysts, such as Seyffart, believe the Litecoin and HBAR ETFs are closest to approval, others highlight regulatory hurdles for projects like Solana and XRP, which face unresolved securities law disputesSeyffart, James. ^[7]. The SEC's current operations plan restricts non-essential activities, further complicating the timeline for approvalsBalchunas, Eric. ^[8].

Market participants remain cautiously optimistic. Historical precedent from Bitcoin and Ethereum ETF launches-which attracted over $12 billion in institutional capital-suggests that successful approvals could drive similar inflows for altcoin ETFs. Academic studies have also shown that ETF approvals tend to correlate with price appreciation for the underlying assets, with Litecoin already up over 100% since initial ETF filings in late 2024Levex. ^[9]. However, volatility and regulatory uncertainty remain risks, particularly if the government shutdown persists or the SEC reverses its current stance under new leadershipSeyffart, James. ^[10].

The approval of these ETFs would mark a pivotal moment for altcoin adoption, offering institutional investors regulated access to assets beyond Bitcoin and Ethereum. This could trigger a broader market shift, with increased liquidity and diversified investment options. While the immediate outlook hinges on the resolution of the government shutdown, the long-term trajectory for crypto ETFs appears robust, with analysts forecasting a wave of approvals in 2025–2026 as regulatory frameworks matureBalchunas, Eric. ^[11].