If the adoption pattern of Bitcoin ETFs is replicated, Litecoin ETFs could see up to $580 million in inflows.

Litecoin (LTC) is potentially on the verge of joining Bitcoin and Ethereum as the next cryptocurrency to receive its own exchange-traded fund (ETF). If approved, the Litecoin ETF could attract substantial investor interest, with estimates suggesting that it might draw in as much as $580 million in inflows. This projection is based on the success of Bitcoin ETFs, which currently hold about 6% of Bitcoin’s total supply.

The company behind this potential offering, Canary Capital, has been making strides in the ETF space. Canary filed for a Litecoin ETF back in October, and the process gained momentum when Nasdaq recently submitted a 19b-4 form to the U.S. Securities and Exchange Commission (SEC). This filing sets a timeline for the SEC to make its decision on whether to approve the ETF.

Litecoin, a cryptocurrency that shares many similarities with Bitcoin, including its Proof of Work consensus mechanism, could benefit from these commonalities in the eyes of the SEC. Analysts believe that Litecoin’s technical aspects may make it a strong candidate for approval as a commodity, just like Bitcoin.

However, the real question is whether there is enough investor demand for a Litecoin ETF to make it successful. While some analysts predict that the ETF might not see the same explosive growth as Bitcoin or Ethereum ETFs, they still believe it will have a dedicated market, especially given Litecoin’s proven utility as a digital asset.

The recent success of Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Fund (IBIT), has set the stage for Litecoin to potentially follow suit. Bitcoin ETFs have broken records, attracting far more capital than initially expected. The same could be true for Litecoin if it gains approval.

According to industry analysts, Bitcoin ETFs currently hold about 6% of Bitcoin’s total market cap, and Ethereum ETFs capture about 3% of Ethereum’s market cap. These figures have become benchmarks for estimating potential inflows into other cryptocurrency ETFs. Projections suggest that Litecoin’s ETF could bring in between $290 million and $580 million in its first year, a sizable sum that would cement Litecoin’s place as a significant player in the market.

While these numbers might not match the astronomical sums accumulated by Bitcoin and Ethereum ETFs, the potential for Litecoin to achieve a notable position in the ETF space is real, especially given its market cap of $9.6 billion. This move would likely enhance Litecoin’s reputation and accessibility for a broader range of investors.