Canary Capital Nears Green Light for Litecoin and Hedera ETFs Amid SEC Approval Buzz

Canary Capital Nears Approval for Litecoin and Hedera ETFs Amid SEC Shutdown Delays

Canary Capital has moved closer to launching its highly anticipated Litecoin (LTC) and Hedera (HBAR) spot exchange-traded funds (ETFs), filing final amendments to its S-1 registration statements with the U.S. Securities and Exchange Commission (SEC). The filings, submitted on October 7, mark a significant step toward providing retail and institutional investors with regulated exposure to altcoins beyond Bitcoin and Ethereum.

The proposed ETFs, which are set to trade under the tickers LTCC for Litecoin and HBR for Hedera, will charge an annual sponsor fee of 0.95 percent, reflecting the premium typically associated with niche cryptocurrency products. Despite the ongoing government shutdown delaying SEC approvals, analysts are optimistic, with Bloomberg experts estimating approval odds exceeding 90 percent once the agency resumes full operations.

Final S-1 Amendments Signal Imminent Launch

The latest submissions by Canary Capital confirm the final structure of the funds, including asset custody, net asset value (NAV) calculations, and management arrangements. Both ETFs will hold their respective tokens directly, with BitGo and Coinbase Custody acting as regulated custodians responsible for the secure storage of LTC and HBAR. The NAV for each fund will be determined daily using aggregated price data from multiple cryptocurrency exchanges, calculated at approximately 4 p.m. Eastern Time.

Eric Balchunas, senior Bloomberg analyst specializing in ETFs, described the final amendments as “the last thing updated before go-time,” emphasizing that the filings are effectively finalized pending SEC approval. Fellow analyst James Seyffart added, “These funds are at the goal line. Approval is highly probable; the only remaining hurdle is procedural delay caused by the government shutdown.”

Impact of Government Shutdown on Approval Timeline

The SEC’s operations were significantly slowed following the October 1 government shutdown, resulting in missed deadlines for decisions on crypto ETF applications. Canary Capital’s filings, however, indicate proactive preparation for a quick approval once full regulatory functionality resumes. Nasdaq has already submitted 19b-4 forms to list both ETFs, signaling institutional readiness to support trading immediately upon SEC authorization.

Analysts say the Litecoin ETF, originally filed in early 2025, follows the broader trend of altcoin-focused investment products emerging after the success of Bitcoin and Ethereum ETFs. Meanwhile, the Hedera ETF has roots in a November 2024 filing, subsequently supplemented by a private HBAR trust designed for accredited investors. These moves reflect Canary Capital’s methodical approach to expanding regulated altcoin exposure to a wider audience.

Investor Benefits and Market Implications

The introduction of Litecoin and Hedera ETFs is expected to significantly broaden retail and institutional access to altcoins. Historically, most cryptocurrency investment products have centered on Bitcoin and Ethereum, leaving other leading coins underrepresented in regulated markets. By providing an ETF framework, Canary Capital is positioning itself to capitalize on growing demand for diversified crypto exposure.

The funds will allow investors to gain direct exposure to LTC and HBAR without the complexities and security risks of managing private wallets. Custodial arrangements with Coinbase and BitGo ensure compliance with U.S. regulatory standards, and daily NAV calculations provide transparent valuation and market tracking. These features make the ETFs particularly appealing to investors seeking a regulated, hassle-free method to gain altcoin exposure.

Altcoin ETFs: A Growing Trend

The proposed Litecoin and Hedera ETFs are part of a broader trend in the institutionalization of altcoins. Following the approval of Bitcoin ETFs, major financial institutions and asset managers have increasingly sought ways to offer clients regulated exposure to a broader array of cryptocurrencies. Analysts expect these products to attract both retail investors seeking diversified portfolios and institutional participants looking for regulated vehicles for altcoin holdings.

The potential launch of these funds is also fueling speculation about Canary Capital’s future ETF initiatives. Industry insiders report that the firm is actively pursuing filings for Solana (SOL) and XRP ETFs, suggesting a strategic vision to lead in providing regulated exposure across multiple high-cap market-cap cryptocurrencies.

Market Analysts See High Approval Odds

While the government shutdown introduces temporary delays, market analysts are bullish regarding the approval likelihood for Canary Capital’s ETFs. The funds’ long development cycle and final S-1 amendments indicate the SEC’s review process is largely complete, with only procedural formalities pending. Once operational, these ETFs could catalyze a new wave of institutional and retail participation in altcoin markets, driving increased liquidity and visibility for LTC and HBAR.

The growing popularity of altcoins in exchange-traded products mirrors a shift in investor sentiment toward a more diversified crypto investment strategy. With Bitcoin and Ethereum ETFs already well-established, products like Litecoin and Hedera ETFs offer investors an opportunity to gain regulated exposure to projects with strong developer communities, established networks, and emerging utility cases.

Technical and Operational Readiness

Canary Capital has emphasized its operational readiness for the ETF launches. The 0.95 percent annual sponsor fee, while higher than standard Bitcoin ETF fees, reflects the additional operational complexity and risk management associated with less liquid altcoins. By employing custodial services from regulated entities, Canary ensures compliance with U.S. securities regulations while mitigating risks related to digital asset storage and security breaches.

The ETFs will also feature daily NAV calculations using a composite of exchange data, a methodology that ensures fair and accurate pricing for investors. This approach is critical in markets that can experience high volatility, providing transparency and confidence to both retail and institutional participants.

Conclusion: Altcoins Enter the Regulated Spotlight

Canary Capital’s filing of final S-1 amendments for Litecoin and Hedera ETFs signals that regulated altcoin products are moving closer to becoming mainstream investment vehicles. While approval timelines remain contingent on the resolution of the SEC’s operational delays, analysts are confident in the funds’ eventual clearance.

These ETFs are expected to not only provide investors with safer access to altcoins but also mark the beginning of a broader push for regulated products encompassing Solana, XRP, and potentially other high-cap altcoins. The move represents a milestone in bridging traditional finance with emerging digital asset markets, signaling a new chapter in institutional crypto adoption.

With LTC and HBAR positioned to become among the first altcoins to receive regulated ETF treatment, Canary Capital is cementing itself as a pioneering player in the next generation of crypto investment products. Investors, market participants, and analysts alike will closely monitor the SEC’s next steps, setting the stage for potentially transformative developments in the altcoin sector.

Source: cryptoNews

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