- Canary Capital files for Litecoin ETF.
- LTC increases by 6.3% after filing.
Institutional demand for exchange-traded funds [ETFs] has grown exponentially and Canary Capital has positioned itself to capitalize on this momentum.
The investment manager submitted an application on October 15 S-1 filing with the US Securities and Exchange Commission [SEC] to launch the first Litecoin [LTC] ETF.
This filing represents the first step in the regulatory process required to launch the fund. The next step is the 19b-4 filing, which seeks SEC approval for an exchange rule change to allow the listing of a new ETF.
The proposed Canary Litecoin ETF will directly hold Litecoin and determine its intrinsic value [NAV] daily, referring to the CoinDesk Litecoin price index [LTX].
How did LTC respond?
After the ETF filing announcement, LTC rose above the $70 mark. An analysis of the daily chart showed that the asset had been trading within a certain range for more than two months.
The inability to maintain momentum above the $67 upper limit led to a pullback in late September.
Source: TradingView
Nevertheless, the revival of buying pressure in mid-October turned this level around. Moreover, the MACD formed a bullish crossover, confirming the positive momentum.
The CMF value of 0.12 indicated the accumulation of assets. At the time of writing, LTC was trading at $71, up 6.3% in the last 24 hours.
After ETH ETF’s slump, is LTC ETF a smart bet?
While the filing has brought optimism to the market, the Ethereum [ETH] The disappointing performance of ETFs warrants caution.
AMBCrypto recently noted That ETH ETFs have faced challenges in attracting the same positive inflows as Bitcoin [BTC] ETFs.
The dominance of outflow in ETH ETFs also raises concerns about the potential success of the proposed LTC ETF.
Additionally, Canary Capital’s relatively limited market presence and lack of experience managing large capital may pose challenges.
Finally, Litecoin lacks the compelling story that has fueled demand for BTC ETFs, which could further limit the ETF’s appeal to institutional investors.
Canary XRP ETF
Interestingly, the Litecoin ETF marks the company’s second planned venture into the crypto ETF space. AMBCrypto reported that Canary Capital applied for a spot on October 8 Ripple [XRP] ETF.
However, the approval of the XRP ETF faces significant hurdles due to the ongoing legal battle between the SEC and Ripple. The prospects for the Litecoin ETF, on the other hand, appear more favorable.
Earlier this year, the US Commodity Futures Trading Commission (CFTC) labeled Litecoin as a commodity in a complaint against KuCoin. This positive regulatory precedent could ease the ETF approval process.
Source: CFTC
