Upcoming Spot Altcoin ETFs May Present Attractive Long SOL, Short LTC Opportunity

According to Vetle Lunde, Head of Research at K33, the approval of new spot altcoin ETFs could open up compelling long/short trading opportunities — particularly between Solana (SOL) and Litecoin (LTC) — due to the so-called "Grayscale effect."

Lunde noted that the Grayscale Solana Trust, launched in 2023, has never traded at a discount and holds only 0.1% of the total SOL supply. This low exposure reduces the risk of market flooding or forced selling due to redemptions.

On the other hand, the Grayscale Litecoin Trust has regularly traded at a discount, holds 2.65% of the LTC supply, and recently faced renewed downward pressure due to in-kind share creations.

This contrast, Lunde explained, points to a cleaner and more stable setup for a potential Solana ETF, whereas a Litecoin ETF could face significant outflows post-launch — similar to what occurred with GBTC and ETHE after their conversions into spot ETFs.

As a result, Lunde sees a long SOL, short LTC trade as a promising strategy, particularly if both ETFs are approved and launched simultaneously.