The approval process for Litecoin ETFs and HBAR ETFs is currently experiencing delays due to the ongoing U.S. government shutdown. Despite these setbacks, analysts remain optimistic about the potential for these exchange-traded funds to transform the cryptocurrency landscape.
What are Litecoin ETFs and HBAR ETFs?
Asset manager Canary Capital has been making strides towards launching its Litecoin ETFs and HBAR exchange-traded funds. Recent filings, which include key final details, suggest that these financial products are near approval. However, the shutdown of the U.S. government has put a temporary halt on the process.
The recent amendments to the Litecoin (LTC) and Hedera (HBAR) spot ETFs introduced a fee of 0.95% and new tickers, LTCC and HBR. According to Bloomberg ETF analyst Eric Balchunas, these additions typically indicate that the funds are ready for launch.
Approval Delays Due to Government Shutdown
With the U.S. Securities and Exchange Commission (SEC) operating with limited personnel, the exact timeline for the approval of Litecoin ETFs remains uncertain. James Seyffart, another Bloomberg analyst, believes that these updates are positive signs, hinting that the ETFs are close to the “goal line.”
Crypto exchange Bitfinex had predicted in August that the authorization of altcoin-linked ETFs might ignite a new rally in altcoins, as such products would provide investors with increased access to these tokens.
Comparing Fees: A Closer Look
The fees for these ETFs are notably higher than those for spot Bitcoin ETFs, which average between 0.15% and 0.25%, according to Ledger. However, Balchunas mentioned that higher fees are typical for new and niche ETF sectors.
If the Litecoin ETFs and HBAR ETFs generate significant interest, it could lead to competition among issuers, with attempts to offer more cost-effective alternatives.
High-Leverage ETFs: The “Spaghetti Cannon” Approach
Despite the government shutdown, companies continue to file for new ETFs, with a particular focus on funds featuring 3x leverage. A 3x ETF tracks a range of assets and uses leverage to triple the daily or monthly returns.
Previous attempts to approve high-leverage crypto ETFs have been met with resistance from the SEC due to concerns over investor protection and market volatility. Tuttle Capital and other issuers have continued to file for these products, aiming to meet the demand of investors seeking high returns.
Future Prospects Amidst Uncertainty
The crypto industry had anticipated a significant influx of new crypto ETFs this October, with the SEC scheduled to make final decisions on numerous applications. Unfortunately, the government shutdown, which began on October 1, has left these plans in limbo.
While the SEC has announced that it will maintain limited operations, the approval process for Litecoin ETFs and other crypto products remains uncertain. Despite these challenges, the potential of these ETFs continues to generate significant interest in the crypto community.
