Canary Capital, an asset manager, seems poised to receive approval for its Litecoin and HBAR exchange-traded funds (ETFs) after submitting crucial final details. However, their launch is unlikely amid the ongoing US government shutdown.
The firm submitted amendments for its Litecoin (LTC) and Hedera (HBAR) spot ETFs on Tuesday, which introduced a fee of 0.95% and the tickers LTCC and HBR.
Bloomberg ETF analyst Eric Balchunas noted in a post on X that these additions are often the final adjustments before approval.
He mentioned that with the US government shut down and the Securities and Exchange Commission largely inactive, the timeline for approval remains uncertain, but the filings “appear to be pretty finalized.”
Another Bloomberg ETF analyst, James Seyffart, expressed optimism about the amendments, stating that it “seems like Litecoin and HBAR ETFs are very close to approval.” He remarked that it feels like they are nearing the finish line.
Analysts at the crypto exchange Bitfinex predicted in August that the green light for altcoin-related ETFs could ignite a new altcoin rally, as this would give investors access to these tokens.
Fees higher than spot Bitcoin ETF, but “fairly standard”
Spot Bitcoin ETFs typically have fees ranging from 0.15% to 0.25%, according to Ledger, making Canary’s 0.95% fees relatively higher, but Balchunas argued that this is not unusual.
“Regarding the 95 basis points fee—it’s expensive compared to spot BTC, but it’s pretty normal to see elevated fees for new ETF categories that are becoming more niche,” he said.
However, he mentioned that if the LTC and HBAR ETFs gain significant investor interest, other issuers may attempt to undercut Canary with lower-cost products.
Issuers pushing for new 3x ETFs despite shutdown
Even though the US government is in shutdown, companies continue to submit applications for new ETFs, as noted by Balchunas and Seyffart, particularly focused on those with 3x leverage.
A 3x ETF is a fund that tracks various assets, such as stocks, while applying leverage to achieve threefold returns daily or monthly. Historically, the SEC has been hesitant to approve high-leverage crypto ETFs due to investor protection concerns regarding volatility and complexity.
ETF issuer Tuttle Capital filed for 60 new 3x ETFs. Another issuer, GraniteShares, also submitted a range of ETF applications covering various assets, including Bitcoin (BTC) and Ether (ETH). ProShares additionally joined the efforts with multiple filings.
Balchunas estimated that around 250 3x ETFs are being proposed, explaining that issuers launch multiple applications simultaneously because they “can be quite profitable.”
“The risk-tolerant investors are eager and likely unaffected by fees,” he remarked, highlighting a dynamic environment in capitalism.
Balchunas clarified that these ETFs utilize swaps for 2x leverage and subsequently employ options to aim for an additional 1x.
Government shutdown leaves ETF approvals uncertain
The crypto sector was anticipated to see numerous new ETFs in October, with the US Securities and Exchange Commission expected to finalize decisions on 16 crypto ETF applications throughout the month.
Related: Altcoin ETFs face decisive October as SEC adopts new listing standards
New listing standards, introduced in September, were expected to expedite the approval process for spot crypto ETFs as they no longer need individual assessments, thus shortening approval timelines.
The government shutdown, which began on October 1, has left these plans in limbo, with deadlines passing without action. The SEC announced on the day of the shutdown that it would continue to operate, albeit with a limited staff.
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