The price of Litecoin lingered in uncertainty over the weekend, reflecting Bitcoin’s performance, which remained under $95,000.
Litecoin (LTC), a well-known proof-of-work cryptocurrency, is currently trading at $103.03, marking a 30% decline from its peak in 2024. This drop is consistent with the trend observed in many cryptocurrencies, which have seen a retreat from the gains achieved last year.
The downturn in Litecoin’s price is partly due to decreasing expectations that the Securities and Exchange Commission will approve a spot LTC ETF by 2025. As per Polymarket, these expectations have fallen to 42% from a high of 60% earlier this year.
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 suggested that the agency would likely approve a Litecoin fund, considering it is a hard fork of Bitcoin (BTC).
Canary Capital is currently the sole company that has submitted an application for a spot Litecoin ETF. Grayscale may follow suit by 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 the introduction of a spot Litecoin ETF could benefit the coin, it is uncertain whether institutional investors will show significant interest. A case in point is the performance of existing spot Bitcoin and Ethereum ETFs. Bitcoin funds boast over $107 billion in assets, accounting for 5.7% of the total market capitalization, while Ethereum funds hold $11.6 billion, or 2.96%. This suggests a lack of strong institutional demand.
Interest in Litecoin is likely to be even less robust than that for Ethereum, given its smaller scale, with a market cap of $7.7 billion. Moreover, Litecoin has experienced a decline in market share within the cryptocurrency space, dropping from a top ten ranking to 22nd place over the last few years.
Polymarket traders are hopeful that the SEC will grant approval to Solana (SOL) and Ripple (XRP) ETFs this year. The probability of the SEC approving a spot XRP ETF stands at 70%, whereas Solana ETFs have a 73% chance. These potential funds may have a better likelihood of success due to their larger market capitalizations of $144 billion and $67 billion, respectively.
