Grayscale Expands Crypto ETF Push as Regulators Soften Stance

Grayscale Investments has filed an S-3 registration statement with U.S. securities regulators to launch a Litecoin exchange-traded fund (ETF), marking another step in its broader initiative to offer retail and institutional investors exposure to alternative cryptocurrencies. The S-3 form streamlines the regulatory process for new offerings, enabling companies like Grayscale to more efficiently bring products to market. The proposed ETF will allow investors to gain indirect exposure to Litecoin (LTC), one of the older digital assets in the market, without the need to directly hold the token.

The Litecoin ETF filing is part of a broader strategy by Grayscale to expand its crypto ETF lineup beyond Bitcoin and Ethereum. In recent months, the firm has submitted applications for ETFs linked to other altcoins including Avalanche (AVAX), Dogecoin (DOGE), Solana (SOL), and XRP. These moves reflect growing investor interest in diversifying cryptocurrency exposure beyond the two largest digital assets. The firm has already converted its Bitcoin and Ethereum trusts into spot ETFs, setting a precedent for the approval of altcoin-based funds.

The regulatory environment is currently favorable for such initiatives. The U.S. Securities and Exchange Commission (SEC) has recently seen a shift in leadership under Chair Paul Atkins, who has taken a more accommodating stance on digital assets compared to his predecessor. This has encouraged asset managers to accelerate their applications for crypto ETFs, with several firms—such as Bitwise, VanEck, and 21Shares—also submitting proposals for Chainlink and other altcoin products. The increased number of filings suggests that institutional demand for a diversified crypto portfolio is on the rise.

Grayscale’s Litecoin S-3 filing mirrors its approach with the proposed Chainlink ETF, which it submitted using a Form S-1 registration. The Chainlink ETF, if approved, would trade under the ticker GLNK on the NYSE Arca. It would convert the existing Grayscale Chainlink Trust into a fund with a structure that supports both cash and potentially in-kind redemptions, similar to the recently approved Bitcoin and Ethereum ETFs. The firm is also exploring a staking feature for its Chainlink offering, which could generate additional yield for investors through third-party staking services, subject to regulatory approval.

Analysts suggest that the surge in ETF applications reflects an industry shift where investors are increasingly looking for exposure to the infrastructure and applications driving decentralized finance (DeFi), blockchain, and smart contracts. Chainlink, for example, operates as a decentralized oracle network that connects blockchain systems with external data sources, such as real-world events and market prices. This functionality is essential for enabling smart contracts to execute based on real-time data. By offering these assets through regulated ETF structures, firms like Grayscale are addressing investor concerns around custody, security, and complexity.