Rumors about a potential Litecoin (LTC) exchange-traded fund (ETF) have sparked a significant price surge, with the digital asset gaining 10% amid speculation of institutional interest. Fox Business journalist Eleanor Terrett, via a post on X (formerly Twitter), revealed a hint of growing institutional intrigue regarding a Litecoin ETF.
Terrett shared, “SCOOP: Hearing institutional-level rumors about possible interest in a Litecoin ETF. The logic is that due to LTC’s functional similarities to BTC, the SEC may be more inclined to approve it, possibly even more so than ETH.”
Why a Spot Litecoin ETF Could Be Possible
This statement comes at a crucial time, as the crypto market continues to navigate regulatory uncertainty and growing interest from traditional financial institutions. To add to the buzz, Terrett highlighted recent actions by Coinbase Derivatives to launch futures contracts for Dogecoin, Litecoin and Bitcoin Cash, scheduled to begin on April 1, 2024.
These futures contracts, as detailed, are part of Coinbase’s strategic move to diversify its offerings by leveraging the self-certification approach under CFTC Regulation 40.2(a). This approach allows entities to launch new products without explicit approval from the CFTC, as long as they comply with the Commodity Exchange Act and accompanying regulations.
Additionally, the recent classification of Ethereum (ETH) and Litecoin (LTC) as commodities by the Commodity Futures Trading Commission (CFTC) in its lawsuit against KuCoin has added another layer of legitimacy to the discourse surrounding Litecoin’s regulatory position. The CFTC’s action emphasizes its view of certain cryptocurrencies as commodities.
Amid these clarifications and regulatory developments, discussions about the potential approval of a spot Litecoin ETF have intensified. Luke Martin, a renowned crypto analyst, echoed the sentiment, suggesting that the approval of an Ethereum ETF could pave the way for other “old altcoins” like Litecoin, which may have a stronger case for not being classified as securities.
He stated: “When the ETH ETF is launched and approved, the issue becomes especially with the SEC’s track record regarding tokens (…) there are other old dinosaur altcoins that you can make an almost stronger argument (that) they are not a title, something that sounds ridiculous, but if you think deeply about it, it is true – Dogecoin you could probably prove that it’s easier not to be a security than ETH. Why wouldn’t they launch Litecoin, Dogecoin?”
CFTC FILE: COINBASE FILES FOR FUTURES LIST $DOGE $LTC $BCH
Is this a hint as to which alts will receive the next ETFs?!
I talked with @zhusu a few weeks ago about this exact scenario and the unique business opportunities that come with a $DOGE ETF. pic.twitter.com/tlyFgDvUhR
-Luke Martin (@VentureCoinist) March 21, 2024
To add to the momentum, Alan Austin, Managing Director of the Litecoin Foundation, express enthusiasm about the prospects of a Litecoin ETF in sight, stating: “I’ll say it again, love ETFs or hate them, the first company to launch a Litecoin ETF is going to kill it!”
LTC Price Is Lagging
Despite the current buzz, Litecoin price analysis indicates that it is still down 77% from its all-time high in May 2021, signaling a bearish trend compared to other cryptocurrencies that have already surpassed their 2021 peaks. a recent break above the 200-week EMA sparked a glimmer of bullish momentum.
Overcoming the red resistance zone between $102 and $106 could be critical for Litecoin to reach new heights, with the $128 mark (0.236 Fibonacci retracement level) as a potential near-term target.
Featured image created with DALL·E, chart from TradingView.com
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