The SEC delayed Canary Capital’s software for a Litecoin ETF right now, opening public feedback over the proposal’s compliance with regulatory necessities. The value of LTC fell 5% after the announcement.
The general public remark facet doesn’t seem to sign the Fee’s intentions; this might be a typical delaying tactic. Nonetheless, the market instantly took it as a bearish sign.
Will the SEC Reject Canary’s Litecoin ETF?
A couple of months in the past, analysts proposed that the Litecoin ETF was extra prone to win SEC approval than every other altcoin ETF. Its Polymarket odds briefly reached 85% in February, and right now’s SEC deadline additional spurred group hype.
Nevertheless, the SEC as a substitute determined to delay this software, together with a request for public feedback in its discover:
“The Fee seeks and encourages individuals to supply feedback on the proposed rule change. The Fee asks that commenters tackle the sufficiency of [whether] the proposal… is designed to stop fraudulent and manipulative acts and practices or raises any new or novel issues not beforehand contemplated by the Fee,” it learn.
To be clear, it’s not constructive that this request constitutes a bearish improvement. The SEC is fielding a variety of altcoin ETF proposals proper now, and it lately delayed a number of.
It even opened public feedback for a Litecoin ETF proposal in February. In different phrases, this could be a typical delaying tactic. Sadly, the market hasn’t taken it nicely.
Litecoin’s worth fell shortly after the Fee delayed this software, dropping 5% at its lowest level. Polymarket’s odds of a Litecoin ETF approval in Q2 2025 additionally plummeted, however the possibilities of a 2025 approval typically remained regular.
Probably the most bullish expectations listed Q2 as a possible time for altcoin ETF approvals, and this guess is now trying fairly unlikely.
In different phrases, issues might be quite a bit worse. James Seyffart, an ETF analyst who predicted the Litecoin delay, didn’t touch upon the general public remark facet. It looks as if a stretch to assert that the SEC is signaling its intent to refuse this or every other altcoin ETF proposal.
Nonetheless, the market can react harshly to such developments within the quick time period, and merchants are repositioning their bets on the altcoin.
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