Grayscale and Coinshares File for Litecoin Spot ETF: Crypto Community Weighs In

Grayscale and Coinshares have filed applications with the U.S. Securities and Exchange Commission (SEC) for Litecoin (LTC) Spot ETFs, sparking a lively debate within the crypto community. Some see it as a step towards greater institutional adoption, while others question Litecoin’s readiness for such a financial product.

• Grayscale and Coinshares file for Litecoin Spot ETF
• Crypto community divided on Litecoin’s readiness
• Analysts debate alternative ETFs and Litecoin’s payment utility

Grayscale and Coinshares filed their applications on January 24, with Grayscale submitting a 19b-4 form to convert its Litecoin Trust into an ETF, and Coinshares filing an S-1 form to launch a new Litecoin Spot ETF. These moves come shortly after Canary Capital also filed for a Litecoin ETF, signaling a competitive race to bring this product to market. An S-1 form is essentially a document used to register a new security with the SEC, while a 19b-4 form is used by exchanges to propose rule changes, such as listing a new ETF.

The push for Litecoin ETFs follows the recent approval of Bitcoin ETFs, highlighting a broader trend of cryptocurrencies seeking mainstream financial acceptance. So, Grayscale and Coinshares are throwing their hats in the ring for a Litecoin ETF. Big move or a big mistake? The crypto community is split on this one.

On one hand, some are hopeful that a Litecoin ETF could pave the way for greater institutional involvement, potentially driving up the cryptocurrency’s value. Litecoin’s been stuck in the same price range for so long, it’s starting to feel like it’s on a permanent vacation. However, crypto expert Ali Martinez isn’t buying it. He argues that Litecoin’s stagnant price over the past eight years indicates it might not be ready for an ETF. Martinez even floats the idea of a USDT ETF, suggesting it could be a more viable option due to the possibility of offering staking yields.

“According to renowned crypto expert, Ali Martinez, the Litecoin market appears largely unready for a spot ETF considering the asset has maintained the same price range over the past eight years.”

On the flip side, Litecoin’s proponents are quick to highlight its robust network activity and utility in the payment sector. Between January 13-20, 2025, Litecoin processed over $69 billion in transactions, averaging $10 billion daily. This surge in activity, as noted by entrepreneur Tarun Tejpal, showcases the cryptocurrency’s growing relevance.

“Notably, between 13-20 January 2025, Litecoin has processed over $69 billion in transactions translating into an average of $10 billion per day.”

Moreover, Litecoin’s use as a payment method is gaining traction. According to BitPay data, Litecoin was the most used cryptocurrency for payments in 2024. Imagine using Litecoin to buy your morning coffee at a local café that accepts cryptocurrency. That’s the kind of real-world utility Litecoin enthusiasts are excited about.

“Litecoin’s achievement as the most used cryptocurrency for payment in 2024 according to data from BitPay, demonstrating significant market interest.”

At the time of writing, Litecoin trades at $123.91, with a modest 0.72% gain in the past day. Bloomberg analysts James Seyffart and Eric Balchunas suggest that Litecoin might be the next cryptocurrency to secure an ETF approval, potentially ahead of other altcoins like Solana and XRP. This prediction is based on Litecoin’s status as a non-security, which could make it more favorable in the eyes of the SEC.

However, the road to ETF approval is fraught with potential risks. Coinshares’ SEC filing acknowledges concerns like hard forks and clones, which could impact the value of the ETF shares. A hard fork is a change to the protocol that results in a split into a new blockchain, while a clone is a cryptocurrency based on another’s code. These events could lead to replay attacks, where transactions on one blockchain are duplicated on another, and might decrease network security post-fork. These risks are crucial for investors to keep in mind.

Despite these challenges, the push for a Litecoin ETF aligns with the philosophy of effective accelerationism (e/acc), which champions rapid technological advancement and adoption. If approved, a Litecoin ETF could accelerate the broader acceptance of cryptocurrencies, furthering the mission of decentralization and financial freedom that many in the crypto space hold dear.

Yet, some critics argue that an ETF might compromise Litecoin’s privacy and decentralization. While Bitcoin remains the king of the hill in the crypto world, Litecoin’s niche as a fast, efficient payment solution could still thrive, even with an ETF.

Key Takeaways and Questions

• What are the potential benefits of a Litecoin Spot ETF?

  A Litecoin Spot ETF could lead to increased institutional adoption and potentially drive significant price growth, similar to what has been observed in the Bitcoin market following ETF approvals.

• Why are some analysts skeptical about the Litecoin Spot ETF?

  Analysts like Ali Martinez are skeptical due to Litecoin’s price stagnation over the past eight years, suggesting that it may not be ready for an ETF. They propose alternative ETFs like USDT, which could offer staking yields.

• How is Litecoin performing in terms of network activity?

  Litecoin has shown robust network activity, with over $69 billion in transactions processed between January 13-20, 2025, averaging $10 billion daily. This indicates strong usage and interest in the cryptocurrency.

• What is Litecoin’s current standing in the payment sector?

  Litecoin has been identified as the most used cryptocurrency for payments in 2024 according to BitPay data, underscoring its relevance and utility in real-world transactions.

• Which other cryptocurrencies are mentioned as potential candidates for future ETF approvals?

  Solana and XRP are mentioned as other altcoins that might secure spot ETF approvals, though Litecoin appears to be ahead in the race.