Nasdaq has made a significant move in the cryptocurrency space by filing a Form 19b-4 with the Securities and Exchange Commission (SEC), kicking off the regulatory review process for what could be the next cryptocurrency exchange-traded fund (ETF). This marks a key milestone in the efforts to list a spot Litecoin ETF, potentially expanding the crypto ETF market beyond established assets like Bitcoin and Ethereum.
The filing signals the SEC’s upcoming consideration of Litecoin, a cryptocurrency known for its faster transaction speeds and lower fees compared to Bitcoin. Litecoin, which was created in 2011, has often been seen as a more cost-efficient alternative to Bitcoin, processing transactions approximately four times faster while using a more decentralized mining algorithm.
Key Milestone for Litecoin’s ETF Bid
The filing follows Canary Capital’s amended S-1 registration statement submitted earlier this week. Bloomberg’s ETF analyst James Seyffart noted on X (formerly Twitter) that the amended filing indicated SEC engagement but emphasized that a Form 19b-4 submission was needed to officially begin the approval process. Nasdaq’s subsequent filing marked that crucial step.
Eric Balchunas, senior ETF analyst at Bloomberg, confirmed the news, stating on X that the filing “bodes well for our prediction that Litecoin is most likely to be the next coin approved.”
This regulatory movement comes amid growing expectations that the cryptocurrency ETF market could soon diversify beyond Bitcoin and Ethereum. Analysts, including those at J.P. Morgan, have forecast that other major cryptocurrencies, such as Solana and XRP, could attract significant investments if ETFs for those assets are approved. According to a recent report, Solana and XRP ETFs could generate between $3 billion and $8 billion in their first year alone.
Unique Position for Litecoin in the Crypto Market
While other cryptocurrencies like Solana and XRP are attracting significant attention, Litecoin stands out for its technical attributes. Unlike Bitcoin, which relies on a more centralized mining system, Litecoin uses a distinct hashing algorithm that supports a more decentralized network. Additionally, its faster transaction processing and lower fees make it an attractive option for a spot ETF.
The proposed Litecoin ETF would differ from others by holding actual Litecoin, rather than futures contracts. According to the S-1 filing, Coinbase Custody Trust Company and BitGo Trust Company would act as custodians for the digital asset.
As of this week, Litecoin saw a notable surge in its market price, rallying by more than 23% in a 24-hour period, outpacing all cryptocurrencies with market capitalizations over $9 billion, according to CoinMarketCap data.
Regulatory Shifts Underway
The timing of this filing also coincides with broader regulatory changes. SEC Chairman Gary Gensler is expected to be replaced by Paul Atkins, a former SEC commissioner who served between 2002 and 2008. This shift could have significant implications for the future of cryptocurrency regulation and the approval of new digital asset-based financial products.
Canary Capital originally filed its Litecoin ETF S-1 registration statement in October 2024, setting the stage for the SEC’s latest move in the cryptocurrency space. If the ETF is approved, it could open the door for further diversification in the cryptocurrency ETF market, providing investors with more options in the fast-evolving sector.
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