Litecoin Price Wobbles as LTC ETF Approval Odds Fall

Litecoin’s price remained volatile over the weekend, mirroring broader cryptocurrency trends, including Bitcoin’s struggle to stay above $95,000. Litecoin (LTC), which has historically been one of the more prominent proof-of-work cryptocurrencies, was trading at $103.03, reflecting a 30% drop from its peak earlier in 2024. This downturn is in line with many digital assets, which have retreated from the gains seen in 2023.

One of the key factors influencing Litecoin’s price movement is the declining likelihood of the U.S. Securities and Exchange Commission (SEC) approving a spot Litecoin ETF in 2025. According to data from Polymarket, the odds for such an approval have slipped to 42%, down from a high of 60% earlier in the year. The news has raised concerns about the future of Litecoin, especially as it struggles to attract institutional investors, who may have hoped the approval of a spot ETF would serve as a major catalyst for growth.

Eric Balchunas, a senior ETF analyst at Bloomberg, had previously voiced optimism about the SEC’s potential approval of a spot Litecoin ETF, citing the fact that Litecoin is a hard fork of Bitcoin. In a post from December, Balchunas suggested that the SEC might find it easier to approve a Litecoin fund because of its similarity to Bitcoin in terms of structure and market recognition. However, it’s clear that the market’s interest is not as high as previously anticipated.

Currently, Canary Capital is the only company to have filed for a spot Litecoin ETF. Grayscale, a major player in the crypto space with its Litecoin Trust holding over $215 million in assets, could also make a move to convert the trust into a spot ETF, following its previous successes with Bitcoin and Ethereum ETFs.

Despite the potential benefits of a spot Litecoin ETF, institutional interest in Litecoin has been weaker than that seen with Bitcoin or Ethereum. Bitcoin ETFs, which collectively hold more than $107 billion in assets (about 5.7% of Bitcoin’s market cap), have seen modest interest from institutional investors. Ethereum ETFs have also garnered some attention, with $11.6 billion in assets (around 2.96% of Ethereum’s market cap).

By contrast, Litecoin has a much smaller market cap of around $7.7 billion and has lost significant ground in the crypto rankings, now sitting in the 22nd position compared to its earlier days as a top-10 coin. This decline in ranking and the relatively low market cap make it less likely for Litecoin to capture the same level of institutional demand that has been seen with larger assets like Bitcoin and Ethereum.

While the future of a spot Litecoin ETF remains uncertain, there is greater optimism surrounding the approval of Solana (SOL) and Ripple (XRP) spot ETFs. According to Polymarket, the odds of the SEC approving a XRP ETF are at 70%, while Solana’s ETF approval odds stand at 73%. These assets have higher market caps—$144 billion for XRP and $67 billion for Solana—making them more attractive to institutional investors. If approved, these ETFs could provide an easier path for institutions to gain exposure to these rapidly growing ecosystems.

While a spot Litecoin ETF might have been a promising development for LTC holders, the decreasing odds of SEC approval have left investors wary. Litecoin’s smaller market cap, declining rank in the broader crypto market, and lower institutional demand compared to Bitcoin and Ethereum have contributed to the uncertain outlook. As the focus shifts toward larger players like XRP and Solana, Litecoin will have to find other catalysts to reignite investor interest in the near future.