The Securities and Exchange Commission (SEC) delayed action on a proposed exchange-traded fund (ETF) for Litecoin, indicating that it will likely postpone rulings on several other pending ETF applications beyond initial expectations.
The Securities and Exchange Commission’s (SEC) postponement of a decision on an exchange-traded fund for the Bitcoin counterpart signals that other digital assets, such as Solana, XRP, and Dogecoin, may also experience extended delays.
The SEC deferred its decision on Canary Funds’ proposed Litecoin ETF, originally expected by May 5, until at least mid-June. It initiated a three-week public comment period, followed by an additional two weeks allocated for rebuttals, effectively allowing the SEC to extend its timeline for reaching a verdict on the ETF’s approval.
This development stands out because many consider Litecoin, a close Bitcoin derivative, the most probable candidate to receive approval as the first new ETF beyond the existing Bitcoin and Ether offerings, though potentially following the evaluation of proposed combined BTC and ETH ETFs. Bloomberg ETF analyst James Seyffart estimates a 90% chance of approval for the Litecoin ETF within this year.
A day prior to the deadline, on May 4, Seyffart stated, “If any asset will likely receive early approval, it would be Litecoin.”
As Expected
In an email to The Defiant, Patrick Gerhart—Telcoin’s president of banking operations and a former political consultant—noted that the SEC’s decision to postpone the Litecoin ETF was unsurprising, as they observed this process previously in ETF approval procedures.
He stated that, nevertheless, this delay may have subdued the elevated expectations within the industry regarding a faster approval path for altcoin ETFs under a pro-crypto administration. “We hope,” he added, “that the postponement reflects the agency’s intention to adopt a more thoughtful and case-specific approach to various types of crypto ETFs.”
Gerhart pointed out that although Bitcoin has existed for a considerable period and regulators view it as more credible, they still develop an understanding of the mechanisms behind other digital assets.
He added that this indicates the SEC is making an effort to further educate itself on cryptocurrencies, aiming to make a well-informed decision and lay the groundwork for the eventual approval of altcoin ETFs.
In an email to The Defiant, SOL Strategies CEO Leah Wald mentioned that the recent leadership transition likely contributed to the delay.
She noted that recent transitions in SEC leadership, including the appointment of Commissioner Paul Atkins just a few weeks ago, likely contribute to a more measured pace as they develop uniform evaluation standards.
SEC Shifts Toward Pro-Crypto Stance
Many anticipate positive outcomes on the over 70 ETF proposals currently before the Commission under the SEC’s new pro-crypto leadership. However, the timing of such developments remains uncertain.
Although analysts attribute a 90% probability to Solana and several “basket” ETFs, Litecoin remains consistently the most likely candidate for the first new ETF due to its close resemblance to Bitcoin.
According to Seyffart, Ripple (XRP) takes the next spot with an estimated 85% approval likelihood, followed by Dogecoin and Hedera at 80%, while Avalanche, Cardano, and Polkadot each have a 75% chance.
ETF specialists Seyffart and Bloomberg senior ETF analyst Eric Balchunas emphasize that all projections assume approvals by year-end rather than within the summer months.
And if they do not grant early approval to Litecoin, they consider the likelihood of any other asset receiving approval ahead of it minimal.
