Litecoin Surges 13% on ETF Speculation and $3.89M Short Liquidations

Litecoin experienced a significant price rally and a sharp increase in trading activity on August 5, 2025, as traders and investors responded to growing speculation about a potential spot ETF approval and a wave of short position liquidations. The cryptocurrency’s trading volume surged 233% in 24 hours, reaching $1.97 billion, while its price climbed more than 13% to $129, marking one of the strongest performances among major cryptocurrencies during the week [1].

The price surge was largely driven by forced buybacks following the liquidation of $3.89 million in leveraged short positions, which accelerated the upward momentum as short sellers scrambled to cover their bets [2]. This activity pushed Litecoin back into the top 20 largest cryptocurrencies by market capitalization, with a valuation of $9.43 billion, reestablishing its relevance in the broader crypto market [3].

Meanwhile, growing optimism around a potential ETF approval contributed to the bullish sentiment. Analysts estimate a 90% likelihood of approval due to Litecoin’s classification as a commodity, which differentiates it from securities and aligns with regulatory standards. The U.S. Securities and Exchange Commission (SEC) has extended its review of Grayscale’s Litecoin ETF application, pushing the decision deadline to October 10, 2025. The regulatory delay has not dampened market enthusiasm but instead fueled speculation and increased demand [4].

Institutional interest in Litecoin also gained attention as MEI Pharma committed $100 million to the asset, echoing early Bitcoin treasury strategies. This move signals growing recognition of Litecoin as a low-beta asset suitable for institutional portfolios and adds a layer of credibility to its long-term investment potential [5].

The Litecoin network also reached a significant milestone, completing its 340 millionth transaction, with over 12% of all transactions occurring in 2025 alone. This reflects increasing network activity and adoption since its launch in 2011, further reinforcing its position as a foundational player in the cryptocurrency space [6].

The recent developments highlight a confluence of factors—forced liquidations, ETF speculation, and institutional adoption—that have collectively driven Litecoin’s resurgence. While the immediate price action is largely technical, the broader narrative around Litecoin as a potential ETF-listed commodity and its growing adoption strengthens its case for sustained interest in the coming months.

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[1][2][3][4][5][6]

https://en.coinotag.com/litecoin-sees-increased-trading-volume-and-price-gains-amid-etf-speculation-and-short-liquidations/