A delay in action on a proposed exchange-traded fund (ETF) for Litecoin has been issued by the Securities and Exchange Commission (SEC), indicating that rulings on several other pending ETF applications are likely to be postponed beyond initial expectations.
The postponement of a decision on an exchange-traded fund for the Bitcoin counterpart by the Securities and Exchange Commission is being viewed as a sign that other digital assets, such as Solana, XRP, and Dogecoin, may also face extended delays.
The decision on the approval of Canary Funds’ proposed Litecoin ETF, originally expected by May 5, was deferred by the SEC until at least mid-June. A public comment period of three weeks has been initiated, 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 is considered notable, as Litecoin—being a close derivative of Bitcoin—is widely regarded as 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. A 90% chance of approval for the Litecoin ETF within this year has been estimated by Bloomberg ETF analyst James Seyffart.
A day prior to the deadline, on May 4, it was stated by Seyffart that “If any asset is likely to receive early approval, it would be Litecoin.”
As Expected
In an email to The Defiant, it was noted by Patrick Gerhart—Telcoin’s president of banking operations and a former political consultant—that the SEC’s decision to postpone the Litecoin ETF was unsurprising, as this process has been observed 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. It is hoped, 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.
It was pointed out by Gerhart that although Bitcoin has existed for a considerable period and is viewed as more credible by regulators, an understanding of the mechanisms behind other digital assets is still being developed by them.
He added that this indicates an effort is being made by the SEC 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, it was mentioned by SOL Strategies CEO Leah Wald that the recent leadership transition is likely to have contributed to the delay.
She noted that the recent transitions in SEC leadership, including the appointment of Commissioner Paul Atkins just a few weeks ago, are likely contributing to a more measured pace as uniform evaluation standards are being developed.
SEC Shifts Toward Pro-Crypto Stance
Positive outcomes on the over 70 ETF proposals currently before the Commission are widely anticipated under the SEC’s new pro-crypto leadership. However, the timing of such developments remains uncertain.
Although a 90% probability has also been attributed to Solana and several “basket” ETFs, Litecoin has consistently been regarded as the most likely candidate for the first new ETF due to its close resemblance to Bitcoin.
According to Seyffart, Ripple (XRP) is considered next in line with an estimated approval likelihood of 85%, followed by Dogecoin and Hedera at 80%, while Avalanche, Cardano, and Polkadot have each been assigned a 75% chance.
It should be emphasized that all projections are being made by ETF specialists Seyffart and Bloomberg senior ETF analyst Eric Balchunas with the assumption that approvals will be granted by year-end rather than within the summer months.
And if early approval is not granted to Litecoin, the likelihood of any other asset receiving approval ahead of it is considered minimal.
 for Litecoin has been issued by the Securities and Exchange Commission (SEC), indicating that rulings on several other pending ETF applications are likely to be postponed beyond initial expectations.){kind=link}