The SEC delayed Canary Capital’s utility for a Litecoin ETF immediately, 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?
Just a few months in the past, analysts proposed that the Litecoin ETF was extra more likely to win SEC approval than some other altcoin ETF. Its Polymarket odds briefly reached 85% in February, and immediately’s SEC deadline additional spurred group hype.
Nonetheless, the SEC as a substitute determined to delay this utility, together with a request for public feedback in its discover:
“The Commission seeks and encourages interested persons to provide comments on the proposed rule change. The Commission asks that commenters address the sufficiency of [whether] the proposal… is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission,” it learn.
To be clear, it’s not optimistic that this request constitutes a bearish improvement. The SEC is fielding lots of altcoin ETF proposals proper now, and it not too long ago delayed a number of.
It even opened public feedback for a Litecoin ETF proposal in February. In different phrases, this is perhaps a typical delaying tactic. Sadly, the market hasn’t taken it effectively.
Litecoin’s value fell rapidly after the Fee delayed this utility, dropping 5% at its lowest level. Polymarket’s odds of a Litecoin ETF approval in Q2 2025 additionally plummeted, however the probabilities of a 2025 approval on the whole remained regular.
Probably the most bullish expectations listed Q2 as a possible time for altcoin ETF approvals, and this guess is now wanting reasonably 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 say that the SEC is signaling its intent to refuse this or some 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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