Asset management company Canary Capital seems poised to receive approval for its Litecoin and HBAR exchange-traded funds (ETFs) after submitting key final details, but these funds are unlikely to launch during the U.S. government shutdown.
Canary submitted amendments for its Litecoin (LTC) and Hedera (HBAR) spot ETFs on Tuesday, adding a fee of 0.95% and the codes LTCC and HBR, respectively.
Bloomberg ETF analyst Eric Balchunas posted on the X platform on Tuesday that these additions "are typically the last updates before [the start time]."
He added that due to the U.S. government shutdown, the Securities and Exchange Commission (SEC) is essentially at a standstill, and it is unclear when approval will be granted, but these applications "seem quite well-developed to me."
Bloomberg ETF analyst James Seyffart also views these amendments as a good sign for approval, stating, "It feels like the Litecoin and HBAR ETFs have reached the finish line."
Analysts from the cryptocurrency exchange Bitfinex predicted in August that the approval of altcoin-related ETFs could trigger a new wave of altcoin rallies, as the product would open these tokens to investors.
According to Ledger data, the fees for spot Bitcoin ETFs average between 0.15% and 0.25%, significantly lower than Canary's 0.95% fee, but Balchunas noted that this is not unusual.
"My view on the 95 basis points fee is that, compared to the expensive spot BTC price, seeing higher fees is quite normal for the new and increasingly niche area of ETFization," he said.
However, he also pointed out that if the LTC and HBAR ETFs attract decent inflows and investor interest, other issuers may attempt to undercut Canary's price by launching cheaper products to compete.
According to Balchunas and Seyffart, despite the U.S. government potentially being in a shutdown, companies are still applying for new ETFs, focusing on 3x leveraged funds.
3x ETFs are funds that track various assets like stocks and apply leverage to achieve three times the daily or monthly returns. In the past, the SEC has rejected or failed to approve high-leverage cryptocurrency ETFs due to concerns about volatility and investor protection.
ETF issuer Tuttle Capital has applied for 60 new 3x ETFs. Another ETF issuer, GraniteShares, has also submitted a batch of ETF applications holding various assets, including Bitcoin (BTC) and Ethereum (ETH). ProShares has also joined the competition with a large number of applications.
Balchunas estimates that there are nearly 250 applications for 3x ETFs and stated that issuers are launching so many at once in a "spaghetti cannon" style because they "make a lot of money."
"Speculators are hungry and fee-insensitive," he added. "This is a powerful combination in capitalism."
Balchunas explained that such ETFs create 2x leverage using swaps and then "target an additional 1x using options."
The cryptocurrency industry was originally prepared for a wave of new cryptocurrency ETFs in October, with the SEC expected to make final decisions on 16 cryptocurrency ETFs throughout the month.
New listing standards announced in September could expedite the approval of spot cryptocurrency ETFs, as each application no longer needs to be evaluated individually, thus shortening the approval timeline.
The government shutdown that began on October 1 has stalled everything, with deadlines passed but no action taken. The SEC stated on the day of the shutdown that it would continue operations, but only with essential personnel.
Related: Stimulus policy discussions meet government shutdown: What tariff-funded checks mean for cryptocurrency
Original article: “Analysts: Canary Litecoin (LTC), Hedera (HBAR) ETFs have reached ‘start time,’ awaiting end of government shutdown”
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