SEC Predicts 90% Chance of Litecoin ETF Approval by 2025

Analysts have predicted a 90% chance of the U.S. Securities and Exchange Commission (SEC) approving a spot Litecoin ETF by the end of 2025. This optimism is based on the fact that Litecoin (LTC) shares a similar proof-of-work consensus mechanism to Bitcoin and has already filed the necessary S-1 and 19b-4 forms, which the SEC has acknowledged. Additionally, the SEC is likely to view Litecoin as a commodity.

The race for more crypto ETFs follows the strong demand for spot Bitcoin and Ether ETFs, which have attracted $40.7 billion and $3.18 billion in net inflows since their launches in January and July 2024, respectively. While a Litecoin ETF may not attract the same level of demand, it could still be worthwhile for fund companies with as little as $50 million in some cases.

The final deadline for the SEC to decide on the Litecoin, Solana, XRP, and Dogecoin ETFs is between Oct. 2 and Oct. 18. A Litecoin ETF could potentially launch before then, according to analysts. Meanwhile, questions remain over the security status of Solana and XRP, which may impact the approval of their respective ETFs.

Analysts expect more crypto ETF filings in the future, with US-based ETF issuers likely to adopt a "spaghetti cannon approach," launching many different ETFs to see what sticks. This could result in a long tail of ETFs holding digital assets in the long run, with those that don't garner interest or flows eventually liquidating.