Litecoin ETF Could Debut Before XRP-Based One Due to Lack of Security Registration: Analyst

Bloomberg Intelligence analyst James Seyffart has shared his thoughts on the possible approval timelines for crypto ETFs in the face of ongoing regulatory scrutiny.

Multiple crypto exchange-traded funds (ETFs) are awaiting approval from the U.S. Securities and Exchange Commission (SEC), and the first approval could be for a Litecoin (LTC) ETF. This is because the SEC has yet to classify Litecoin as a security, unlike XRP.

Several firms have filed applications for new crypto ETFs. Grayscale Investments recently filed with the SEC to convert its XRP trust into an ETF that would trade on the New York Stock Exchange.

The trust currently holds about $16.1 million, giving investors exposure to XRP without requiring them to buy it directly. In addition to Grayscale’s filing for XRP, applications for ETFs based on Solana (SOL) and Dogecoin (DOGE) have also been submitted.

Bitwise, Wisdom Tree, and Canary Capital have also filed proposals for XRP ETFs. On January 29, the SEC began the regulatory review process for a spot Litecoin ETF from Canary Capital.

The SEC’s legal challenges over XRP, which the agency claims is a security, could delay the approval of an XRP ETF. However, Litecoin's status remains unchallenged.

The SEC has provided feedback on the amended S-1 registration document for the Litecoin ETF filed by Canary Capital, according to Eric Balchunas. The S-1 form, which details the fund's financial structure, is a key step in the approval process.

Nasdaq's 19b-4 application, which is necessary for listing new financial products, is also being examined. However, analyst James Seyffart believes that if Paul Atkins is confirmed as SEC chair, the agency may reconsider its current lawsuits related to XRP’s classification as a security.