Litecoin ETF Filings Spark Excitement Amid Bearish Market Signals

The crypto market is a buzz with the recent efforts of large financial institutions, like Grayscale and CoinShares, to introduce a Litecoin ($LTC) spot exchange-traded fund (ETF).

These moves could mean the push to place Litecoin alongside more traditional investment vehicles is picking up steam.

Nevertheless, despite all this ETF optimism, the altcoin’s price remains in the same trading range it’s occupied for months—a range that stretches from roughly $50 at the bottom to around $75 at the top.

A major digital asset manager, CoinShares, has filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC) to initiate a Litecoin ETF. This filing reflects not only CoinShares’s desire to broaden its product line but also the growing institutional interest in providing investment vehicles for the cryptocurrencies that are not Bitcoin or Ethereum.

At the same time, Grayscale, a prominent entity in the crypto investment world, is trying to change its Litecoin Trust (LTCN) into an ETF. By filing Form 19b-4 with the SEC, Grayscale is working to make LTCN more accessible to people who usually invest in stuff like stocks and bonds. If the change is approved, Grayscale would allow people to invest in Litecoin using a much more “traditional” and easily understood financial product.

Grayscale’s CEO has stressed the company’s dedication to growing its crypto investment vehicles well beyond the niche markets that they currently occupy. “Converting Litecoin Trust into an ETF is part of our larger mission to bring digital assets into the fold of traditional financial products,” a spokesperson stated.

Should these ETFs gain the necessary approvals, they could significantly enhance not only Litecoin’s institutional presence but also its retail standing, as these funds would allow investors to gain exposure to the cryptocurrency without actually holding it.

The broader enthusiasm for ETF applications appears to have made its way into Litecoin’s market, but the price itself has done little to impress Litesians. The nudging towards $70 has mostly been on the back of the ETF chatter. In terms of actual movement, Litecoin’s price stays in a channel between $65 and $68 and has done so now for about 18 days.

At present, the price of Litecoin floats near $141. Here, large holders—in the cryptocurrency world, usually called “whales”—have been unloading their positions. This selling has been pressuring the price of Litecoin, and with it, the sentiment among major investors has turned cautious.

Along with whale activity, a few market metrics are causing worries over Litecoin’s immediate future. Our hash rate and transaction count have been dropping lately, and these are two big indicators of network activity.

The Litecoin network’s computational power, securing everything that happens on the network, is not represented in Litecoin’s hash rate, but rather in the number of core Litecoin miners. The hash rate, meanwhile, is a much better indicator of network health. And since Litecoin has been around for almost a decade, its core hashrate (as opposed to the number of Litecoin miners) has been steadily increasing year over year.

In the same way, if the number of transactions declines, it could mean that the user number is going down, which may cause investors to lose faith in the long-term usefulness of Litecoin.

The effort to establish a Litecoin ETF flows from the broader surge in applications for cryptocurrency-based ETFs. In the United States and abroad, authorities have begun granting approvals for Bitcoin ETFs. A Litecoin ETF might well be next, with growing expectations that Ethereum-based ETFs could also circulate soon thereafter.

Often called “digital silver” in comparison to Bitcoin’s “digital gold,” Litecoin has long been considered a reliable and well-established cryptocurrency. Its relatively lower volatility and faster transaction speeds make it an attractive option for both everyday users and investors. The introduction of a Litecoin ETF could further solidify its position as a key player in the crypto market.

The move by Grayscale and CoinShares to file for an ETF is a good step for Litecoin, yet the market responded tepidly. Investors are likely to be in a holding pattern—awaiting more clarity from regulators before making any aggressive moves in either direction.

Whale activity indicating a bearish trend, a hash rate that is falling, and dwindling transaction counts are somewhat of an albatross around Litecoin’s neck and could provide some headwinds for the price in the short term. But if the ETFs get approved, that could bring in a totally different current and give Litecoin’s price a nice, pleasant rise.

At a pivotal moment, Litecoin is poised to break into traditional financial markets, as underscored by the heavyweights of the ilk of Grayscale and CoinShares pushing for a spot ETF. But with market momentum clearly not on our side, can Litecoin actually accomplish that breakthrough?

The next several months will be very important since the SEC will be looking over the ETF filings, and the market will be determining the long-term worth of Litecoin. For the moment, cautious investors are biding their time, waiting to see what happens with these two developments. Should both go off without a hitch, however, we could be looking at an emerging crypto darling in Litecoin, as it could realize a sudden boost in both demand and worth.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!

Image Source: dusanzidar/123RF // Image Effects by Colorcinch

The post Litecoin ETF Filings Spark Excitement Amid Bearish Market Signals appeared first on The Merkle News.