Asset manager Canary Capital seems poised to receive approval for its Litecoin and HBAR exchange-traded funds (ETFs) after submitting crucial final details; however, their launch is unlikely during the current US government shutdown.
Canary submitted amendments to its Litecoin (LTC) and Hedera (HBAR) spot ETFs on Tuesday, adding a fee of 0.95% along with the tickers LTCC and HBR.
Bloomberg ETF analyst Eric Balchunas stated in a post on X that these additions usually represent the last updates 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 “look pretty finalized to me.”
Fellow Bloomberg ETF analyst James Seyffart also suggested that the amendments indicate impending approval and mentioned it “feels like Litecoin and HBAR ETFs are at the goal line here.”
Analysts from the crypto exchange Bitfinex predicted in August that the approval of altcoin-related ETFs might trigger a new altcoin rally, as these products would provide investors access to the tokens.
Fees higher than spot Bitcoin ETF, but “pretty normal”
Spot Bitcoin ETFs typically charge fees ranging from 0.15% to 0.25%, according to Ledger, making Canary’s 0.95% fees relatively expensive, although Balchunas noted that such fees are not out of the ordinary.
“My take on the 95bp fee. It’s pricey compared to spot BTC, but it’s quite common to see higher fees for newer and more niche areas entering the ETF space,” he remarked.
However, he also noted that if the LTC and HBAR ETFs attract significant investor interest and flow, other issuers may attempt to undercut Canary with cheaper alternatives.
Issuers’ “spaghetti cannon” 3x ETFs despite shutdown
Despite the US government shutdown, companies continue to file for new ETFs, according to Balchunas and Seyffart, focusing particularly on 3x leveraged funds.
A 3x ETF is a fund that tracks various assets, such as stocks, leveraging them to achieve three times the daily or monthly return. Previously, the SEC has rejected or declined to approve high-leverage crypto ETFs due to investor protection concerns surrounding volatility and complexity.
ETF issuer Tuttle Capital submitted applications for 60 new 3x ETFs. Another issuer, GraniteShares, also filed a series of ETF applications covering a range of assets, including Bitcoin (BTC) and Ether (ETH). ProShares further joined the mix with multiple filings.
Balchunas estimates that there are nearly 250 3x ETF filings, and remarked that issuers are using a “spaghetti cannon” approach by submitting multiple filings simultaneously because they “prove profitable.”
“The degens are hungry and fee insensitive,” he commented. “A powerful combination in capitalism.”
Balchunas clarified that these ETFs achieve 2x leverage using swaps but add an additional 1x through options.
Government shutdown leaves ETF approvals in limbo
The crypto sector anticipated the approval of numerous new crypto ETFs in October, with the US Securities and Exchange Commission expected to finalize decisions on 16 crypto ETFs throughout the month.
Related: Altcoin ETFs face decisive October as SEC adopts new listing standards
In September, new listing standards were also introduced, potentially speeding up the approval process for spot crypto ETFs, as each application would no longer need individual assessment, thus shortening timelines.
The government shutdown, effective from October 1, has stalled progress, leading to missed deadlines and no developments. The SEC announced on the day the shutdown began that it would continue with limited operations.
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