Will Litecoin Be the Next Approved Altcoin ETF?

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As the U.S. presidential inauguration approaches and outgoing Securities and Exchange Commission (SEC) Chair Gary Gensler prepares to step down, a wave of asset management firms is rushing to file applications for a new generation of crypto-related exchange-traded funds (ETFs). These include proposals for Litecoin ETFs, XRP and Solana leveraged and inverse funds, futures-based products, and actively managed digital asset strategies—aimed at meeting growing investor demand for regulated crypto exposure.

This surge in filings signals a pivotal moment in the evolution of cryptocurrency adoption within traditional finance. With regulatory uncertainty potentially giving way to a more favorable environment under new leadership, market participants are positioning themselves for what could be a transformative year in digital asset investment.

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Litecoin: A Strong Contender for the Next Spot Approval?

Among the altcoins vying for ETF approval, Litecoin (LTC) stands out as a leading candidate. According to Bloomberg Intelligence ETF analyst Eric Balchunas, Litecoin’s structural similarity to Bitcoin—being a direct fork of Bitcoin’s original code—could position it as a commodity rather than a security under current regulatory frameworks. This classification would align with how Bitcoin was ultimately approved for ETF status, significantly increasing Litecoin’s chances.

Canary Capital Group, founded in September 2024 by Steven McClurg, former co-founder of Valkyrie Funds, has filed for the Canary Litecoin ETF. Nasdaq, which would list the product, submitted its required 19b-4 form on January 17, indicating that SEC officials have already provided comments on the S-1 registration statement—a key step forward in the review process.

Balchunas argues there’s little logical basis for the SEC to reject Litecoin if it has already accepted Bitcoin, given their technical parallels. However, he remains cautious about actual market demand. While regulatory approval may be within reach, whether investors will embrace a Litecoin ETF at scale remains an open question.

Still, the momentum is building. If approved, the Canary Litecoin ETF could become the first spot altcoin ETF in the U.S., setting a precedent for others to follow.

XRP ETF Applications Multiply

XRP has also attracted significant interest from major asset managers. ProShares has filed paperwork for multiple XRP-based ETFs, including:

These products reflect a broader trend toward complex, derivatives-based crypto investment vehicles that allow traders to speculate on price movements without holding the underlying asset directly.

Other firms that have previously filed or expressed interest in XRP ETFs include 21Shares, Bitwise, WisdomTree, and Canary Capital Group. Despite these efforts, regulatory hurdles remain substantial. The SEC has historically treated XRP as a security due to its central issuance model and ongoing litigation with Ripple Labs. As such, any spot XRP ETF is unlikely to gain approval until the legal landscape becomes clearer—particularly after the conclusion of key court cases and under new SEC leadership.

👉 Explore how regulatory shifts could unlock new crypto investment opportunities in 2025.

Solana ETFs: Innovation Meets Regulatory Hurdles

Solana (SOL) is another high-profile contender in the race for ETF approval. ProShares has submitted applications for Solana futures, leveraged, and inverse ETFs—products designed for sophisticated investors seeking short-term trading tools.

Meanwhile, several firms—including VanEck, 21Shares, Bitwise, Grayscale (which seeks to convert its existing trust), and Canary—have filed for spot Solana ETFs. These would track the real-time price of SOL and require direct custody solutions.

However, like XRP, Solana faces significant regulatory headwinds. The SEC has previously included Solana in investigations related to unregistered securities offerings, citing concerns over centralized development and token distribution. Until these issues are resolved through court rulings or updated guidance, spot Solana ETF approvals are likely on hold.

Nonetheless, growing institutional interest suggests that once clarity emerges, Solana could quickly move to the front of the line—especially given its robust ecosystem and high performance in recent years.

Beyond Spot ETFs: New Frontiers in Crypto Investment Products

The latest round of filings reveals that innovation in crypto investing extends far beyond simple spot ETFs. Asset managers are now exploring diverse strategies to meet varied investor needs.

Oasis Capital Digital Asset Debt Strategy ETF

Oasis Capital has proposed an actively managed fund focused on convertible bonds issued by companies operating in the digital asset space. The fund intends to allocate at least 80% of its assets to debt instruments from firms involved in mining, blockchain infrastructure, and payment systems. This approach offers exposure to the crypto economy while maintaining a debt-based risk profile—an attractive option for conservative investors.

CoinShares Valkyrie Digital Asset ETF

This proposed ETF aims to track the performance of the top 10 digital assets, with individual token weights capped at 35%. It will invest solely in exchange-traded products (ETPs) listed on major exchanges in the U.S., Canada, and the EU—ensuring compliance with liquidity and regulatory standards. Notably, the filing explicitly names Bitcoin, Ethereum, Solana, and XRP as potential components.

VanEck Onchain Economy ETF

VanEck’s latest proposal takes a different route: the Onchain Economy ETF would invest in publicly traded companies driving digital transformation—such as blockchain developers, crypto miners, and financial infrastructure providers—without directly holding cryptocurrencies. This structure sidesteps many custody and valuation challenges while still offering exposure to blockchain innovation.

Frequently Asked Questions (FAQ)

Q: Why is Litecoin considered more likely to get ETF approval than other altcoins?
A: Because Litecoin is a direct fork of Bitcoin and shares similar decentralized characteristics, regulators may classify it as a commodity—just like Bitcoin—making it easier to approve under current frameworks.

Q: Are XRP or Solana ETFs likely to be approved soon?
A: Unlikely in the short term. Both assets face unresolved legal questions over whether they qualify as securities. Approval will likely depend on court outcomes and policy shifts under a new SEC chair.

Q: What’s the difference between a spot ETF and a futures ETF?
A: A spot ETF holds the actual asset (e.g., real Bitcoin), while a futures ETF tracks futures contracts. Spot ETFs offer direct exposure but face tougher regulatory scrutiny; futures ETFs are easier to approve but come with roll costs and tracking errors.

Q: Can investors currently access altcoin exposure through ETFs?
A: Not directly in the U.S. While Bitcoin spot ETFs are available, no altcoin spot ETFs have been approved yet. Some investors use Canadian-listed ETPs or futures-based products for indirect access.

Q: What role does SEC leadership play in crypto ETF approvals?
A: The SEC chair significantly influences enforcement priorities and interpretations of securities law. A change in leadership could lead to more favorable treatment of crypto assets, especially if the new chair supports innovation and market access.

Q: Are leveraged or inverse crypto ETFs suitable for long-term investors?
A: Generally no. These products are designed for short-term trading due to compounding effects and daily rebalancing. They can deviate significantly from long-term asset performance.

👉 Stay ahead of the curve—see how emerging crypto financial products could impact your portfolio.

Core Keywords

With regulatory winds shifting and institutional appetite growing, 2025 could mark the beginning of a new era in crypto investing—one where altcoins finally gain mainstream financial legitimacy through regulated investment vehicles. While challenges remain, the foundation is being laid for broader market participation and deeper integration between blockchain innovation and traditional capital markets.