Following the landmark approvals of Bitcoin and Ethereum ETFs, recent activity surrounding Litecoin has sparked excitement among investors and analysts.

SEC Engagement Sparks Optimism

The U.S. Securities and Exchange Commission (SEC) is currently reviewing a filing for a Litecoin ETF. This development was highlighted by Eric Balchunas and James Seyffart, ETF analysts at Bloomberg Intelligence, who noted increased regulatory engagement with the filing submitted by Canary Capital Group. James Seyffart commented on X, “Canary Funds just filed an amended S-1 for their Litecoin ETF filing. No guarantees—but this might be indicative of SEC engagement on the filing.”

CanaryFunds submits an amended S-1 filing for their proposed Litecoin ETF. Source: James Seyffart via X

Canyay Capital Group, an investment firm focused on digital assets, filed amended paperwork with the SEC—along with Nasdaq—that puts the regulator on the clock for a decision. In this proposed physically held ETF, custodians listed include Coinbase Custody Trust Company and BitGo Trust Company.

Eric Balchunas added: “The Litecoin ETF now has all boxes checked. Very real chance this ends up being the first altcoin ETF of 2025”

Market Reactions and Investor Activity

News of the possible ETF approval has sent Litecoin flying. In the last 24 hours, LTC surged 18% to change hands at $136 as its trading volume soared over 250% to $1.83 billion, data from CoinMarketCap indicated. New Litecoin price predictions suggest Litecoin will finally outperform in 2025 after a stagnant three years of sideways trading.

Litecoin surges 16.1% in market cap within 11 hours, breaking away from other altcoins. Source: Santiment via X

The rally is explained by the sudden and growing interest from institutional and retail investors. According to on-chain analytics firm Santiment, whales and sharks holding at least 10,000 LTC have been on a buying spree since January 9, acquiring more than 250,000 coins.

Projected Inflows of Up to $580 Million

Industry experts predict that a Litecoin ETF could attract significant inflows. One report by JPMorgan estimated that should the adoption rates be similar to Bitcoin ETFs, Litecoin could have somewhere between $290 million and $580 million invested into it in its first year. Steven McClurg, the co-founder of Canary Capital, said the fact it uses the proof-of-work consensus mechanism—just like Bitcoin—makes it most likely to be the one to get approved.

Litecoin (LTC) price chart. Source: Brave New Coin

He emphasized that, although there is not a strong futures market for Litecoin as there is with Bitcoin and Ethereum, the similarities to the latter in technology and structure could be advantageous. “Litecoin’s Bitcoin-like traits may prove advantageous under the new SEC leadership,” he said. Litecoin is seen as the silver, to Bitcoin’s gold.

Competition from XRP and Solana ETFs

Though Litecoin is on course to take pole position in the altcoin ETF race, other strong contenders such as XRP and Solana are on the run, too. Analysts see XRP ETFs receiving inflows up to $8 billion, while those tracking Solana will likely see $3 billion to $6 billion. However, regulatory clarity and market demand will ultimately determine the success of these funds.

Bloomberg analysts predict a 2025 surge in crypto ETF approvals, eyeing XRP, Solana, Litecoin, and Hedera ($HBAR) with SEC leadership shifts. Source: BlockchainDaily via X

Edouard Hindi, Chief Investment Officer at Tyr Capital, noted, “The bar for accepting new crypto ETFs will likely be lowered in 2025. While Litecoin is ahead, XRP and Solana ETFs are also strong contenders.”

A Milestone Year for Crypto ETFs

Should Litecoin secure approval, it would mark a milestone for the cryptocurrency market, expanding the ETF ecosystem beyond Bitcoin and Ethereum. However, as JPMorgan’s Kenneth Worthington cautioned, “Investor demand for additional products remains uncertain. Tokens beyond Bitcoin, Ethereum, or Solana often capture attention for a limited time.”

Regardless of the outcome, 2025 appears poised to be a transformative year for the crypto ETF market, with Litecoin at the forefront of this evolution. Whether the SEC’s decision paves the way for new opportunities or highlights existing challenges, the anticipation underscores the growing importance of regulated crypto investment vehicles in the broader financial ecosystem.