The U.S. Securities and Exchange Commission (SEC) is scheduled to make a decision on the proposed spot trading ETF for Litecoin (LTC) by Canary Capital on May 5.
Meanwhile, market watchers have become more optimistic. The odds of approval have risen to their highest point on Polymarket since mid-March.
Will the SEC approve the Litecoin ETF?
In January, Nasdaq submitted the proposed rule change (filed as 19b-4) for the listing and trading of shares of the Litecoin Canary Fund. The proposal was published for public comment in the Federal Register on February 4. The initial 45-day review period began, which ended on March 21.
However, the Securities and Exchange Commission chose to extend this period by 45 days, setting May 5 as the new 90-day deadline.
"Accordingly, the committee sets, pursuant to section 19(b)(2) of the Act, May 6, 2025, as the date by which the committee must approve or disapprove, or begin proceedings to determine whether to disapprove the proposed rule change (File No. SR-NASDAQ-2025-005)," according to the statement.
The regulatory body took similar steps for other cryptocurrency ETF applications. On April 29, the SEC delayed its decision on Franklin Templeton's XRP (XRP) spot ETF until June 17 and the proposal for Dogecoin (DOGE) by Bitwise until June 15. The Grayscale Ethereum (ETH) spot ETF faced the same fate.
Earlier, on April 24, the regulatory body delayed decisions regarding Bitcoin (BTC) and Ethereum ETFs from Bitwise and Canary Capital and Hedera (HBAR). The new deadlines are now June 10 and 11, respectively.
Similarly, Grayscale's application to convert its Polkadot (DOT) Trust to an ETF has also been delayed. The new decision deadline is June 11.
However, the SEC's decision not to delay the Litecoin ETF beyond the 90-day deadline has garnered significant attention from the community. Bloomberg ETF analyst James Seyfarth highlighted this in a recent post on X (formerly Twitter).
"The SEC went early and delayed a batch of filings but not this one," Seyfarth wrote.
Nonetheless, he confirmed that while Litecoin may be approved soon, a delay is still the most likely outcome.
"If any asset has a chance for early approval, it’s Litecoin IMO. I personally think a delay is the most likely outcome but definitely something to watch," he added.
Previously, the analyst estimated that the Litecoin ETF has the highest chance of approval, at 90%, among all altcoin ETFs. This expectation seems to align with market sentiment.
On the prediction platform Polymarket, the odds of approval rose to 79%, the highest since mid-March. Additionally, the odds of approval by July increased, rising to 49%.
A favorable decision for the ETF could pave the way for broader adoption of Litecoin, which is often seen as a lighter and faster alternative to Bitcoin. Conversely, rejection or further delay may indicate continued regulatory hesitation in the digital currency space. Over time, all eyes remain on the SEC's next move.
