Litecoin Price Struggles as Odds for LTC ETF Approval Decline
Litecoin’s price remained subdued over the weekend, closely tracking Bitcoin’s performance, which has yet to break above the $95,000 mark. The popular proof-of-work cryptocurrency, trading at $103.03, has dropped 30% from its 2024 peak. This decline mirrors a broader retracement in the cryptocurrency market, where many digital assets have relinquished last year’s gains.
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Declining Odds for Spot Litecoin ETF Approval
Litecoin’s muted performance is partially attributed to the decreasing likelihood of the U.S. Securities and Exchange Commission (SEC) approving a spot Litecoin ETF in 2025. According to Polymarket, the probability has dropped to 42%, down from 60% earlier this year.
Eric Balchunas, a senior ETF analyst at Bloomberg, had previously expressed optimism about the SEC’s potential approval of a Litecoin ETF, citing its status as a Bitcoin hard fork as a key factor. However, recent market sentiment indicates growing skepticism.
Canary Capital remains the sole applicant for a spot Litecoin ETF, while Grayscale may consider converting its $215 million Litecoin Trust into an ETF, as it has done for Bitcoin and Ethereum.
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Institutional Interest in Litecoin ETFs Remains Uncertain
While the approval of a spot Litecoin ETF could be a positive development for the cryptocurrency, its appeal to institutional investors remains unclear. For comparison:
Bitcoin ETFs account for $107 billion in assets, representing 5.7% of Bitcoin’s total market cap.
Ethereum ETFs hold $11.6 billion, or 2.96% of its market cap.
These figures highlight relatively limited institutional demand, which could be even weaker for Litecoin due to its smaller market cap of $7.7 billion. Once ranked among the top ten cryptocurrencies, Litecoin has slipped to 22nd place, reflecting its diminishing market share and influence.
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Optimism for Solana and Ripple ETFs
In contrast, Polymarket traders are more optimistic about the SEC approving ETFs for Solana (SOL) and Ripple (XRP) this year. The odds of approval for a spot Solana ETF stand at 73%, while Ripple ETF approval odds are at 70%. These cryptocurrencies benefit from significantly larger market caps, with Solana valued at $67 billion and XRP at $144 billion, increasing their appeal to institutional investors.
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Conclusion
Litecoin’s price remains vulnerable as uncertainties over a spot ETF weigh heavily on investor sentiment. With institutional demand for Litecoin lagging behind its larger counterparts like Bitcoin and Ethereum, the road to recovery may depend on broader market conditions and the eventual approval of a Litecoin ETF. Meanwhile, attention is shifting toward Solana and Ripple, which appear better positioned to capitalize on institutional interest in the ETF market.