Canary Capital Applies for First US ETF Tracking Litecoin

Canary Capital Group, the fledgling investment firm founded by ex-Valkyrie Funds co-founder Steven McClurg, has applied for the first U.S. ETF tracking the spot price of litecoin, as issuers aim to meet rising demand for a wide range of cryptocurrency-focused funds.

Litecoin is the token of the Litecoin blockchain network and the twenty-second largest digital asset with a roughly $5.2 billion market capitalization. The fund's "objective is to...provide exposure to the price of LTC," according to the application filed Tuesday with the Securities and Exchange Commission. 

The application is Canary's second in a week for an ETF based on an altcoin, a term describing any digital asset other than bitcoin. On Oct. 8, the one-month-old firm filed for a fund tracking XRP, the seventh largest crypto by market capitalization. 

Those proposals and recent applications for funds based on the Solana token reflect issuers' widening efforts to address strong demand for crypto-based funds following the wildly successful debut of spot bitcoin earlier this year. Those ETFs have generated close to $20 billion in net inflows, according to U.K. asset manager Farside Investors. 

A Canary litecoin fund would not be a first, however. CoinShares and ETC Group, a unit of Bitwise, currently offer exchange traded products in Europe providing litecoin exposure, and Grayscale has a trust tracking the token's performance. 

Canary's application–called an S-1 registration statement–is part of a two-step process. The SEC must also approve a 19b-4 filing in which a stock exchange requests a rule change allowing the ETF to trade. The firm did not list an expense ratio or ticker. 

Litecoin Improves on Bitcoin?

Litecoin was recently trading at about $70, up more than 5% over a 24-hour period at one point Tuesday, according to crypto data provider CoinMarketCap. Bitcoin, the largest digital asset by market value, was up about 1% over the same period. 

The Litecoin protocol was created in 2011 by software engineer Charlie Lee to improve on bitcoin's slower transaction speeds and create a more user-friendly cryptocurrency. According to the Litecoin Foundation, users have completed 77 million transactions year-to-date, an all-time high for the protocol already besting 2023's 67 million. 

In an emailed statement, McClurg wrote that "Litecoin presents a unique and compelling opportunity for investors seeking exposure to a time-tested and reliable cryptocurrency."

"Litecoin continues to play a leading role in the broader cryptocurrency ecosystem, which Canary believes could make it attractive to a wider range of institutional investors," he added. 

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