Analysts Predict 90% Chance of Litecoin ETF Approval in 2025

Bloomberg Analysts Predict 90% Chance of SEC Approval for Spot Litecoin ETF in 2025

Bloomberg exchange-traded fund (ETF) analysts forecast a 90% probability that the U.S. Securities and Exchange Commission (SEC) will approve a spot Litecoin ETF before the end of the year.

According to Bloomberg’s James Seyffart and Eric Balchunas, Litecoin’s chances of approval in 2025 are higher than other pending ETF proposals, including spot ETFs for XRP, Solana, and Dogecoin, which they estimate have 65%, 70%, and 75% chances of approval, respectively.

Litecoin’s Advantage in the ETF Approval Process

Created in 2011 as a faster alternative to Bitcoin, Litecoin (LTC) operates on a similar proof-of-work (PoW) consensus mechanism, making it one of the more straightforward cryptocurrencies for regulatory approval.

In a post on X (formerly Twitter), Seyffart and Balchunas noted that Litecoin’s regulatory path appears smoother since both S-1 and 19b-4 forms have already been filed and acknowledged by the SEC. Additionally, the SEC likely categorizes Litecoin as a commodity, further increasing its chances of approval.

Crypto ETF Demand on the Rise

The surge in demand for cryptocurrency ETFs has been evident, particularly with the success of spot Bitcoin (BTC) and Ethereum (ETH) ETFs. According to Farside Investors, since their launches in January and July 2024, these ETFs have recorded net inflows of $40.7 billion and $3.18 billion, respectively.

While Seyffart acknowledges that a Litecoin ETF may not attract the same level of investor demand as Bitcoin or Ethereum ETFs, he believes it could still be valuable for fund issuers. Even ETFs managing as little as $50 million in assets could prove profitable for investment firms.

“They don’t have to hit it out of the park on a flows basis to be worthwhile from an issuer perspective,” Seyffart told Cointelegraph.

SEC’s Decision Timeline for Crypto ETFs

The final SEC decision deadlines for the Litecoin, Solana, XRP, and Dogecoin ETFs fall between October 2 and October 18, 2025, based on Seyffart’s estimates. He also indicated that a Litecoin ETF could launch even earlier if approved before this timeframe.

Additionally, Canary Capital and 21Shares have submitted ETF applications for Hedera (HBAR) and Polkadot (DOT), although Bloomberg’s analysts have yet to assign approval odds for these filings.

More Crypto ETF Filings Expected

Seyffart anticipates a wave of new crypto ETF filings, describing a “spaghetti cannon” approach where issuers test multiple options to see which gain traction.

“Issuers will try to launch many, many different things and see what sticks,” Seyffart explained.

He further noted that while numerous ETFs will enter the market, those failing to attract investor interest or sufficient capital inflows will likely be liquidated over time.

Interestingly, Balchunas pointed out that before U.S. President Donald Trump’s election win on November 5, 2024, the approval odds for all crypto ETFs—except Litecoin—were below 5%.

Regulatory Uncertainty for Solana and XRP ETFs

While Litecoin’s regulatory classification appears favorable, uncertainty surrounds the security status of Solana (SOL) and XRP. Seyffart believes an XRP ETF will remain on hold until the SEC’s lawsuit against Ripple reaches full resolution.

In August 2023, Ripple secured a partial legal victory, with a ruling stating that XRP is not a security when sold on secondary markets. However, the SEC later appealed this ruling, arguing that Ripple violated securities laws when selling XRP directly to retail investors.

With a leadership transition at the SEC, Ripple now hopes the new chair, Mark Uyeda, will reconsider the enforcement case against XRP.

As for Solana, Seyffart indicated that before an ETF can be approved, the SEC must determine whether SOL qualifies as a commodity under the commodities ETF framework. Until then, Solana’s ETF prospects remain uncertain.