Litecoin price wobbles as LTC ETF approval odds fall

Litecoin price remained high throughout the weekend, mirroring Bitcoin’s performance below $95,000.

Litecoin (LTC), a popular proof-of-work coin, remains at $103.03, down 30% from its 2024 high. This decline is in line with most cryptocurrencies that have shed some of last year’s gains.

Litecoin’s performance is also driven by the diminishing odds of the Securities and Exchange Commission approving a spot LTC ETF in 2025. These odds have fallen to 42% from this year’s high of 60%, according to Polymarket.

LTC ETF rates dropped | Source: crypto.news

Bloomberg senior ETF analyst Eric Balchunas supported the view that the SEC would approve the spot LTC ETF. In a December post, he argued that the agency would easily approve a Litecoin fund due to a Bitcoin (BTC) hard fork.

We expect a wave of cryptocurrency ETFs next year, though not all at once. First in line are probably btc + eth combination ETFs, followed by Litecoin (bc fork = commodity), then HBAR (not labeled as a security), then XRP/Solana (labeled as a security pending… pic.twitter.com/29vMdciZxE

— Eric Balchunas (@EricBalchunas) December 17, 2024

Canary Capital is the only company applying for a spot Litecoin ETF. Grayscale could also apply to convert the Litecoin Trust, which has over $215 million in assets, into a spot ETF, as it has done with Bitcoin and Ethereum.

While the Spot Litecoin ETF is a good thing for the cryptocurrency, it’s unclear whether it will attract the interest of institutional investors. A good example of this is the performance of spot Bitcoin and Ethereum ETFs. Bitcoin funds have assets of over $107 billion, or 5.7% of the total market capitalization. Ethereum funds hold $11.6 billion, equivalent to 2.96% of market cap, indicating weak institutional demand.

Interest in Litecoin will be weaker than Ethereum as it is a smaller crypto project with a market cap of $7.7 billion. It has also lost market share in the crypto industry as its cryptocurrency ranking rose from the top 10 a few years ago to 22.

Polymarket investors are optimistic that the SEC will approve the Solana (SOL) and Ripple (XRP) ETFs this year. The agency has a 70% chance of approving the spot XRP ETF and 73% for the Solana ETFs. These funds may have a chance of success because the market capitalization of the two is $144 billion and $67 billion, respectively.