Bloomberg analysts recently rated the odds of approval for a spot ETF for Litecoin at 90%, placing it ahead of other altcoins such as Dogecoin, Solana, and XRP.
Why Litecoin Has the Best Odds
The key reason for Litecoin's high approval likelihood is its regulatory status. As a fork of Bitcoin operating on the same proof-of-work (PoW) mechanism, Litecoin is considered a commodity rather than a security. The absence of an ICO or pre-sale further reduces its likelihood of regulatory scrutiny by the SEC. Grayscale and Canary Capital have submitted spot LTC ETF applications that analysts believe meet all regulatory requirements.
Regulatory Hurdles for Solana and XRP
While Solana and XRP have a fair chance of ETF approval, their regulatory status remains unclear. The SEC vs. Ripple case is still unresolved; although a ruling stated that XRP isn't a security when sold on secondary markets, the SEC continues to challenge this. Solana was directly named as a security in SEC lawsuits against Coinbase and Binance, making classification more difficult.
Political Shifts and Market Impact
The regulatory environment shifted after Donald Trump's election victory, signaling a more crypto-friendly administration, potentially easing the SEC's stance on digital assets. This has accelerated ETF filings, with recent 19b-4 forms for Litecoin and XRP ETFs submitted by Nasdaq on behalf of CoinShares, and additional filings for XRP ETFs from Canary Capital and others.
The likelihood of spot ETF approvals for altcoins like Litecoin is increasing due to regulatory and political shifts. However, Solana and XRP continue to face challenges due to their regulatory status.
