Investment manager Canary Capital has taken another step towards expanding the cryptocurrency market by filing a formal application to launch a Litecoin ETF in the United States.
The proposal aims to facilitate access for investors interested in cryptocurrencies, but who wish to avoid the complexity of dealing directly with these digital assets. This move comes shortly after the same company filed for the creation of an XRP ETF, which reinforces the growing interest of financial institutions in the cryptocurrency market.
The Litecoin ETF emerges as a more accessible alternative for those who want to be exposed to the asset’s appreciation. All this without having to go through the traditional acquisition and storage processes, such as creating digital wallets and managing private keys.
With this initiative, Canary Capital seeks to attract investors who, until now, saw the cryptocurrency sector as something intimidating or complicated.
Litecoin ETF could impact cryptocurrency price and attract institutions
This new Litecoin ETF will operate similarly to other cryptocurrency exchange-traded funds. The fund will hold Litecoin as its sole asset, seeking to replicate the value of the cryptocurrency, net of operational costs.
With this, investors will be able to acquire ETF shares and trade them on the secondary market, following the market value of Litecoin, but in a safer and less risky way compared to directly purchasing the cryptocurrency.
One of the main advantages of the ETF is its security. The manager promises to keep most of the assets in “cold storage” (offline storage), protecting the private keys from possible cyberattacks. Only a small fraction will be kept in “hot wallets” (online wallets) to facilitate immediate transactions.
The creation of this ETF could have a significant impact on the Litecoin market, mainly due to the actions of large financial institutions, which can exploit arbitrage opportunities and influence the price of the cryptocurrency.
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