As a seasoned analyst with over two decades of experience in the financial markets, I find the recent moves by Grayscale Investments and Canary Capital to launch ETFs for crypto assets such as Bitcoin, Ethereum, XRP, Litecoin, among others, highly intriguing.
Grayscale Investments has asked the United States Securities and Exchange Commission (SEC) for permission to change their combined crypto investment fund into a tradable Exchange Traded Fund (ETF).
This development comes as Canary Capital makes plans for a spot Litecoin ETF.
Grayscale’s New ETF
As an analyst, I’m currently analyzing Grayscale’s Digital Large Cap Fund (GDLC). This over-the-counter trading fund manages a substantial $524 million in assets. According to the company’s documentation, Bitcoin (BTC) takes up 75% of this portfolio, while Ethereum (ETH) occupies approximately 19%. The remaining percentage is diversified across other digital assets such as Solana (SOL), Avalanche (AVAX), and XRP.
Should it be granted, Grayscale anticipates that the ETF will become available for trading on the New York Stock Exchange (NYSE). The exchange has previously submitted a 19b-4 form to the Securities and Exchange Commission (SEC), expressing its backing for this conversion process.
This action is a continuation of Grayscale’s triumph this year, where they transformed their Bitcoin (GBTC) and Ethereum (ETHE) investment trusts into Exchange-Traded Funds (ETFs), as well as creating smaller variations of these.
As an analyst, I initiated the launch of our XRP-focused trust in September, mirroring our established Bitcoin and Ethereum funds. This trust serves as a foundation for potential future transformation into a Spot XRP Exchange Traded Fund (ETF).
In spite of the continuous legal disputes between Ripple and the SEC, Brad Garlinghouse, the company’s CEO, remains optimistic about the future possibility of an Exchange Traded Fund (ETF) specifically dedicated to XRP.
Besides Grayscale, other contenders such as Bitwise and Canary Capital are also planning to join the XRP ETF market. In the past few weeks, they have submitted their applications with the Securities and Exchange Commission for XRP spot ETFs. These funds aim at mirroring the token’s price by utilizing the Chicago Mercantile Exchange’s CF Ripple index.
Canary Capital Eyes Litecoin ETF
Simultaneously, Canary Capital has unveiled intentions for a Litecoin Exchange-Traded Fund (ETF). As outlined in their proposal, this ETF would own Litecoin (LTC) and calculate its daily net asset value based on the CoinDesk Litecoin Price Index.
According to information from CoinGecko, Litecoin (LTC) boasts a market cap of around $5.3 billion, positioning it as the 26th largest digital currency.
According to Eleanor Terret’s report for Fox Business, Canary Capital referred to Litecoin as a dependable, well-rooted digital currency that holds considerable promise for institutions.
As a researcher, I find myself consistently impressed by Litecoin’s robust base, a factor that positions it as a key player within the expansive cryptocurrency landscape. This strong presence, in my view, could potentially pique the interest of a diverse group of institutional investors.
Recently, a representative from the venture capital company voiced positivity about the possibility of the SEC’s approval for these funds, pointing to “promising indications of a more lenient regulatory atmosphere” based on past approvals as their reasoning.
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2024-10-16 13:18