In a pivotal development for the U.S. cryptocurrency investment landscape, CoinShares has formally submitted applications to the Securities and Exchange Commission (SEC) for two new exchange-traded funds (ETFs): a spot XRP ETF and a spot Litecoin (LTC) ETF. This strategic move signals growing institutional confidence in altcoin-based financial products and underscores a broader shift in regulatory sentiment toward digital asset investment vehicles.
As the crypto market evolves beyond Bitcoin (BTC) and Ethereum (ETH), asset managers are increasingly exploring diversified offerings that cater to investor demand for regulated exposure to major altcoins. CoinShares’ filings represent one of the most significant steps yet in expanding the ETF ecosystem to include high-market-cap, established cryptocurrencies outside the top two.
Expanding the Altcoin ETF Frontier
CoinShares has filed an S-1 registration statement with the SEC to launch a spot XRP ETF, designed to offer investors direct exposure to Ripple’s native token. XRP, currently ranked among the top 10 cryptocurrencies by market capitalization, has seen renewed momentum in 2025 following favorable regulatory developments and increased adoption in cross-border payments infrastructure.
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The proposed fund would track the real-time price of XRP, allowing both retail and institutional investors to gain exposure without managing private keys or navigating exchanges directly. This aligns with the growing preference for secure, regulated investment channels in digital assets.
Simultaneously, CoinShares has applied for a spot Litecoin ETF, positioning itself as one of the few firms actively pursuing such products in the United States. Litecoin, often referred to as “digital silver” to Bitcoin’s “digital gold,” has maintained a stable presence in the crypto ecosystem since its 2011 launch. While its price performance has been relatively flat over the past several years, it continues to serve as a reliable network for fast, low-cost transactions.
This dual filing places CoinShares alongside other major players like Grayscale Investments, which recently submitted proposals for both a Solana ETF and a Litecoin ETF through the New York Stock Exchange (NYSE). These coordinated efforts suggest a broader industry push to diversify the range of available crypto ETFs beyond BTC and ETH.
Market Reaction and Investor Sentiment
Despite strong year-to-date performance—XRP has surged over 500% in 2025, breaking out of a long-term consolidation zone below $0.50—the announcement of the spot ETF application did not trigger an immediate spike in price. At the time of reporting, XRP was trading around $3.10, with a marginal 0.4% decline over the previous 24 hours.
This muted reaction may reflect market caution or the anticipation of a lengthy regulatory review process. Historically, the SEC has taken months—or even years—to approve crypto-based ETFs, particularly those involving tokens still under legal scrutiny.
However, recent shifts in U.S. regulatory policy have created a more favorable environment for such approvals. The increasing clarity around how certain cryptocurrencies are classified—especially post-SEC rulings on Ethereum—has emboldened asset managers to test new boundaries.
Expert Skepticism on Litecoin ETF Viability
While enthusiasm surrounds the XRP ETF proposal, the Litecoin ETF application has drawn skepticism from some industry analysts. Notably, on-chain analyst Ali Martinez raised concerns about the long-term value proposition of a Litecoin-based fund.
Martinez pointed out that Litecoin has traded within a narrow price range since 2017—essentially delivering zero net price appreciation over eight years. In contrast to high-growth altcoins like Solana or Avalanche, Litecoin’s stagnant valuation raises questions about investor appetite for an ETF tied to its performance.
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He further questioned whether more utility-driven assets—such as stablecoins like USDT—might offer better use cases for ETF structures, particularly if they incorporate staking or yield-generation mechanisms. “Why launch a Litecoin ETF when a USDT yield-bearing fund could offer tangible returns?” Martinez remarked on social media.
While these critiques highlight valid concerns, proponents argue that Litecoin’s enduring network reliability, widespread exchange support, and brand recognition make it a viable candidate for inclusion in diversified crypto portfolios.
Why Altcoin ETFs Matter in 2025
The push for altcoin ETFs marks a maturation phase in the crypto investment ecosystem. With Bitcoin and Ethereum ETFs now well-established and attracting billions in inflows, investors are seeking diversification, risk mitigation, and sector-specific exposure—all of which altcoin ETFs can provide.
Key benefits include:
- Regulatory compliance: ETFs operate under strict oversight, offering transparency and investor protection.
- Accessibility: Traditional finance investors can access altcoins through familiar brokerage accounts.
- Security: No need for self-custody; underlying assets are held by custodians.
- Market legitimacy: Approval signals regulatory acceptance of an asset’s status as non-security.
These factors contribute to broader adoption and help bridge traditional finance with decentralized technologies.
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Frequently Asked Questions (FAQ)
What is a spot XRP ETF?
A spot XRP ETF is an exchange-traded fund that holds actual XRP tokens rather than futures or derivatives. It allows investors to gain exposure to XRP’s real-time market price through regulated financial markets.
Has the SEC approved any altcoin ETFs yet?
As of early 2025, the SEC has approved spot Bitcoin and Ethereum ETFs but has not yet greenlit any altcoin-specific ETFs, including those for XRP or Litecoin. Applications are under review.
Why is CoinShares applying for a Litecoin ETF?
CoinShares aims to expand investor access to major altcoins through regulated vehicles. Despite Litecoin’s flat price history, its established infrastructure and brand recognition support its inclusion in diversified crypto portfolios.
Will an XRP ETF boost its price?
While ETF approval could lead to increased institutional demand and higher prices over time, short-term reactions may be muted due to market expectations and regulatory uncertainty.
How does a spot ETF differ from a futures-based ETF?
A spot ETF holds the actual underlying asset (e.g., real XRP), while a futures-based ETF tracks contracts speculating on future prices. Spot ETFs are generally preferred for transparency and alignment with asset value.
What are the risks of investing in altcoin ETFs?
Risks include regulatory delays, market volatility, potential rejection by the SEC, and long-term uncertainty about an asset’s utility and adoption trajectory.
The filings by CoinShares represent more than just product launches—they signal a strategic evolution in how digital assets are being integrated into mainstream finance. As regulatory clarity improves and investor demand grows, the approval of spot XRP and Litecoin ETFs could pave the way for a new wave of innovation in crypto investment products.