Canary Capital has filed an application for a Spot Litecoin (LTC) exchange traded fund (ETF) with the U.S. Securities and Exchange Commission, highlighting the coin’s ‘leading role in the broader cryptocurrency ecosystem’.
The S-1 filing was formalised on Tuesday, with Canary noting that the Litecoin network “is an alternative software implementation of Bitcoin”, but with transactions being four times as fast than on the original Bitcoin network.
The fund seeks “to provide exposure to the price of LTC held by the Trust,” according to the filing.
Senior Bloomberg ETF analyst Eric Balchunas said the filing was certainly the first ever in the United States, “but may also be first ever in [the] world”.
The former co-founder of Valkyrie Funds, Steven McClurg, founded Canary Capital is an Australian asset manager is a digital asset-focused investment firm that seemingly wants to lead the developing world of cryptocurrency ETFs.
In an email statement, the asset manager said that Litecoin plays a “leading role in the broader cryptocurrency ecosystem” and so will be “attractive to a wider range of institutional investors.”
“Canary believes that Litecoin presents a unique and compelling opportunity for investors seeking exposure to a time-tested and reliable cryptocurrency. As one of the longest-running blockchains with 100% uptime since its inception, Litecoin has demonstrated a proven track record of security and reliability with significant enterprise-grade use cases.”
Financial products that hold Litecoin today include one from CoinShares in Switzerland, and another via Grascayle’s LTCN trust in the United States.
In terms of regulatory hurdles, Litecoin is likely to be treated in a similar way to Bitcoin given its inherent backwards compatibility and widely-acknowledged status as a digital commodity by users, stakeholders and regulators.
In fact, while regulators are still at odds on the status of Ethereum, both the U.S. Securities and Exchange Commission (SEC) as well as the Commodities Futures Trading Commission (CFTC) have referred to Litecoin as a digital commodity, which could fast-track approval ahead of other ETF applications.
Unlike Ethereum, Litecoin has not undergone a change in its consensus algorithm, leaving its 13-year track record spotless, and its status as a digital commodity uncontroversial.
Meanwhile, Canary Capital has also filed for a spot XRP ETF. However, the filing faces an uphill struggle as the SEC has been embroiled in a legal battle with Ripple for having raised $1.3 billion through the token sale of XRP, which it views as an unregistered security.
Litecoin rallied by around 10% when the news broke, reaching as high as $72 on Tuesday. The coin exchanges hands at $71.40 at the time of writing, after having modestly retraced from $73 on Wednesday.
Litecoin’s attractive properties have historically come from its close proximity to Bitcoin. However, this long-standing relationship might soon be upgraded with the coin’s developing role in virtual private money upgrades.
Beyond that, being an open-source, decentralised and reliable network with near-instant transactions at a fraction of the cost to Bitcoin is an attractive prospect for a growing cohort of users.
Today, just after its 13-year anniversary, Litecoin is viewed as a complementary Bitcoin asset with a proven track record, and as an exceptionally powerful medium for commerce, all while retaining the properties that make the digital commodity valuable.
Buy, trade and exchange Litecoin on reviewed exchanges here.
Disclaimer: the content on this site should not be considered as investment advice. Investing is speculative. Your capital is your responsibility.
