Litecoin Price Volatility Increases Amid Diminishing Chances of LTC ETF Approval -

Over the weekend, Litecoin’s price stayed precariously balanced, reflecting Bitcoin’s performance, which remained beneath $95,000.

Litecoin (LTC), a widely recognized proof-of-work cryptocurrency, stagnated at $103.03, marking a 30% drop from its peak in 2024. This downturn mirrors the trend seen in many cryptocurrencies that have retraced some of their gains from last year.

The performance of Litecoin was also influenced by dwindling expectations that the Securities and Exchange Commission will greenlight a spot LTC ETF by 2025. As reported by Polymarket, the probability of approval has decreased to 42%, down from a high of 60% earlier this year.

LTC ETF odds have fallen — LTC ETF odds have declined | Source: crypto.news

Eric Balchunas, a senior ETF analyst at Bloomberg, has expressed optimism regarding the SEC’s approval of a spot LTC ETF. In a post from December, he contended that the agency would likely approve a Litecoin fund with ease, as it is a hard fork of Bitcoin (BTC).

We expect a wave of cryptocurrency ETFs next year, albeit not all at once. First out is likely the btc + eth combo ETFs, then prob Litecoin (bc its fork of btc = commodity), then HBAR (bc not labeled security) and then XRP/Solana (which have been labeled securities in pending… pic.twitter.com/29vMdciZxE

— Eric Balchunas (@EricBalchunas) December 17, 2024

Canary Capital is currently the only firm that has submitted an application for a spot Litecoin ETF. Grayscale might also consider filing to convert its Litecoin Trust, which holds over $215 million in assets, into a spot ETF, similar to its actions with Bitcoin and Ethereum.

While a spot Litecoin ETF could be beneficial for the cryptocurrency, it remains uncertain whether it will capture the attention of institutional investors. A pertinent example can be seen in the performance of spot Bitcoin and Ethereum ETFs. Bitcoin funds boast over $107 billion in assets, accounting for 5.7% of the total market cap, while Ethereum funds hold $11.6 billion, representing 2.96% of the market cap, highlighting a lack of substantial institutional interest.

Interest in Litecoin is expected to be even lower than Ethereum’s since it is a smaller project with a market capitalization of $7.7 billion. Additionally, it has experienced a decline in market share within the crypto sphere, dropping from a top ten coin ranking to 22nd place over the past few years.

Traders on Polymarket are feeling optimistic about the SEC potentially approving Solana (SOL) and Ripple (XRP) ETFs this year. The likelihood of a spot XRP ETF approval stands at 70%, while Solana ETFs are at 73%. These funds may have a better chance of success given their market capitalizations of $144 billion and $67 billion, respectively.