At this critical juncture of January 21, 2025, the dynamics of the cryptocurrency market have attracted much attention, and the dual melody of regulation and development is playing a new chapter. The progress of the application of Litecoin spot ETF and the change of leadership of the two core regulatory agencies, SEC and CFTC, are intertwined, outlining a new picture full of variables and opportunities for the cryptocurrency industry.

1. Litecoin ETF: A new dawn in the field of cryptocurrency ETFs

On January 17, Nasdaq submitted Form 19b-4 for Canary Funds’ Litecoin spot ETF, a milestone move that not only marked the official entry of the application into the 240-day review period, but also heralded a new development opportunity for the cryptocurrency ETF sector.

(I) Application Enters Critical Stage

According to SEC regulations, after submitting Form 19b - 4, the SEC must make a decision on whether to approve within 240 days or request further information. This indicates that the application for the Litecoin ETF has entered a critical period. Bloomberg analyst James Seyffart revealed that Canary Funds has submitted a revised S - 1 filing, which likely means that the SEC is involved in the review process, undoubtedly a positive signal for the Litecoin ETF's approval.

II. Regulatory Agency Restructuring: New Expectations for the Cryptocurrency Industry

With the Trump administration about to come to power, the restructuring of the two major regulatory agencies, the SEC and CFTC, has become the focus of the market, bringing new hope to the cryptocurrency industry.

(I) SEC Restructuring: Signals of Attitude Change

In the early hours of January 21, the SEC announced that Gary Gensler had stepped down, and current SEC commissioner Mark Uyeda assumed the role of acting chair. Uyeda is a Republican and has been a SEC commissioner since June 30, 2022, maintaining a friendly attitude on cryptocurrency issues, opposing Gary Gensler's aggressive enforcement actions. Trump’s nominee, former SEC commissioner Paul Atkins, will officially take charge, and Atkins has openly criticized the SEC's excessive regulation of the cryptocurrency industry, expecting to support cryptocurrency.

(II) CFTC Restructuring: Industry-Friendly Expectations

The CFTC is also undergoing restructuring, with Rostin Behnam stepping down, and Trump nominating Caroline Pham as acting chair, who is expected to later become the permanent chair. Although Pham has not clearly expressed support for cryptocurrencies like Uyeda, the market expects her to hold a relatively friendly attitude toward the industry.

III. Market Expectations and Predictions: Potential Opportunities for Altcoins

With the shift in regulatory winds, the market is full of expectations for the future development of altcoin ETFs, and analysts are making predictions.

(I) Litecoin ETF Approval Prediction

Bloomberg analysts James Seyffart and Eric Balchunas predict that with the pro-crypto Trump administration coming to power, Litecoin (LTC) may be the first cryptocurrency ETF to receive approval. This prediction is based on in-depth analysis of the cryptocurrency market and judgments about the SEC's future regulatory stance.

(II) Capital Inflow Prediction

JPMorgan analysts expect that if multiple altcoin ETFs are approved by the SEC, they could attract up to $14 billion in capital inflow. This prediction is based on existing cryptocurrency ETF 'adoption rate' data, such as the Bitcoin ETF attracting about $108 billion in assets one year after its launch.

(III) Altcoin Growth Potential Prediction

Marketwatch reports that some industry insiders believe that after Trump returns to the White House, altcoins may have more room for growth than Bitcoin. Hashdex Chief Investment Officer Samir Kerbage points out that altcoins may benefit more from a digitally asset-friendly regulatory environment; StarkWare General Counsel Katherine Kirkpatrick Bos indicates that Bitcoin has always had regulatory certainty, while altcoins do not, and regulatory uncertainty hinders some institutional investors from investing in them. If the classification of cryptocurrencies outside of Bitcoin becomes clearer, investors may feel more secure allocating funds to these cryptocurrencies, potentially driving up their prices.

The cryptocurrency market is at a new historical starting point, with the progress of the Litecoin ETF application and the restructuring of the SEC and CFTC bringing unprecedented development opportunities to the industry. The market is full of expectations for future regulatory directions, and the approval of altcoin ETFs will become an important topic in the cryptocurrency market in the coming months. This vibrant and challenging industry is waiting to shine anew in the new regulatory environment, and its development process is worth our continued attention.

Provided-----current information by @OwlX_ai

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