Rumors surrounding a potential Litecoin (LTC) Exchange-Traded Fund (ETF) spot fund have sparked a significant price surge, with the digital asset gaining 10% on speculation about institutional interest. Fox Business journalist Eleanor Terrett, in a post on X (formerly Twitter), revealed observations suggesting growing institutional intrigue towards a Litecoin ETF.
Terrett common, “SCOOP: I’m hearing rumors at an institutional level about possible interest in a Litecoin ETF. The logic is that due to LTC’s functional similarities to BTC, the SEC may be more willing to approve it, perhaps even more than ETH.”
Why a Litecoin Spot ETF Might Be Possible
This announcement comes at a crucial time as the cryptocurrency market continues to grapple with regulatory uncertainty and growing interest from time-honored financial institutions. Furthermore, Terrett highlighted recent moves by Coinbase Derivatives to launch Dogecoin, Litecoin and Bitcoin Cash futures, all scheduled to begin on April 1, 2024.
These futures contracts, as detailed, are part of Coinbase’s strategic move to diversify its offerings by leveraging a self-certification approach under CFTC Regulation 40.2(a). This approach allows entities to introduce fresh products without the CFTC’s express approval, provided they comply with the Commodity Exchange Act and its accompanying regulations.
Moreover, the recent classification of Ethereum (ETH) and Litecoin (LTC) as commodities by the Commodity Futures Trading Commission (CFTC) in its lawsuit against KuCoin has added another level of legitimacy to the discourse on Litecoin’s regulatory position. The CFTC’s action underscores its view of some cryptocurrencies as commodities.
Amid these clarifications and regulatory changes, discussions around the potential approval of a Litecoin spot ETF have intensified. Luke Martin, a well-known cryptocurrency analyst, echoed this sentiment, suggesting that the approval of the Ethereum ETF could pave the way for other “old altcoins” such as Litecoin, which may have a stronger case for not being classified as securities.
He stated: “When the ETF launches and passes, the question becomes particularly related to the SEC’s track record versus tokens […] there are other old dinosaur altcoins that could almost make a stronger case [that] they are not a security, which sounds ridiculous, but if you think about it, it is true – Dogecoin, which is probably easier to prove, is not a security than ETH. Why wouldn’t they release Litecoin, Dogecoin?”
CFTC SUBMISSION: COINBASE FILES FOR CONTRACT LISTS $DOGE $LTC $BCH
Is this a hint as to which alts will get ETFs next?!
He talked with @zhusu a few weeks ago about this exact scenario and the unique trading opportunities that come with $DOGE ETF. pic.twitter.com/tlyFgDvUhR
— Luke Martin (@VentureCoinist) March 21, 2024
Adding momentum, Alan Austin, Managing Director at the Litecoin Foundation, expressed enthusiasm about the prospects of a Litecoin spot ETF, stating: “I’ll say it again, love ETFs or hate them, the first company to launch a Litecoin ETF will crush it!”
LTC price lags
Despite the current turmoil, Litecoin price analysis indicates that it is still down 77% from its all-time high in May 2021, signaling a downward trend compared to other cryptocurrencies that have already surpassed their 2021 highs. Nevertheless however, the recent break above the 200-week EMA has sparked a glimmer of bullish momentum.
Breaking the red resistance zone between $102 and $106 could be crucial for Litecoin to reach fresh highs, with the $128 mark (0.236 Fibonacci retracement level) being a potential short-term target.
Featured image created with DALL·E, chart from TradingView.com
