In a significant move for the crypto asset space, Nasdaq has formally submitted a 19b-4 application to the U.S. Securities and Exchange Commission (SEC) to list and trade exchange-traded funds (ETFs) tied to Ripple’s XRP and Litecoin (LTC). This filing, made on behalf of European digital asset manager CoinShares, marks a major step toward broader institutional adoption of cryptocurrencies beyond Bitcoin and Ethereum.
The application follows CoinShares’ earlier S-1 filings for spot Litecoin and XRP ETFs and reflects a growing trend of traditional finance entities seeking to offer regulated crypto investment vehicles. This initiative aims to enhance investor exposure to these major altcoins while aligning with evolving U.S. regulatory frameworks.
Understanding the Nasdaq ETF Filing
A 19b-4 form is a required submission to the SEC for proposing a rule change that would allow a new product—in this case, an ETF—to be listed and traded on an exchange. Nasdaq’s filing indicates its intention to list two distinct ETFs: the CoinShares Litecoin ETF and the CoinShares XRP ETF.
This process is separate from, but complementary to, the S-1 registration statement filed by the ETF issuer. While the S-1 details the fund’s structure and objectives for investors, the 19b-4 seeks approval for the exchange’s trading rules. Both are necessary for the ETFs to launch.
The move signals Nasdaq’s confidence in both the regulatory pathway and market demand for these products. It also represents a strategic effort by CoinShares to expand its footprint in the lucrative U.S. digital asset market.
Why Litecoin Is Seen as Having a Clearer Path to Approval
Market analysts and experts are closely watching the approval odds for both funds, with many predicting that a Litecoin ETF is more likely to gain SEC approval before an XRP fund.
Key Factors Favoring Litecoin:
- Regulatory Classification: The Commodity Futures Trading Commission (CFTC) has previously classified Litecoin as a commodity in legal proceedings, notably in a lawsuit against the crypto exchange KuCoin. This designation places it in a similar regulatory category as Bitcoin and Ethereum, which already have approved ETFs, potentially simplifying the SEC’s review process.
- Absence of Major Legal Challenges: Unlike XRP, Litecoin is not embroiled in an ongoing, high-stakes lawsuit with the SEC over whether it is a security. This lack of legal ambiguity removes a significant hurdle.
- Technical Similarity to Bitcoin: Often referred to as the "silver to Bitcoin's gold," Litecoin shares a similar proof-of-work mining mechanism and is generally viewed as a pure-play, decentralized cryptocurrency. This familiar structure may be more palatable to regulators.
Eric Balchunas, a senior ETF analyst at Bloomberg, echoed this sentiment, stating, “Litecoin ETF now has all the boxes checked... I don’t see any reason why this would be withdrawn given SEC gave comments on the S-1, Litecoin is seen as a commodity, and there’s a new SEC sheriff in town.”
XRP’s More Complex Regulatory Journey
While the odds for an XRP ETF are also rising, its path is considered more complex due to its unique regulatory history.
Ripple Labs, the company associated with XRP, has been in a protracted legal battle with the SEC. Although a landmark 2023 court ruling found that XRP itself is not necessarily a security when sold to retail investors on exchanges, the case created regulatory uncertainty. The SEC’s appeal of aspects of the ruling continues to cast a shadow.
For the SEC to approve an XRP ETF, it would likely need greater clarity and finality regarding the token’s legal status. Despite these challenges, the mere filing of an application is a bullish signal for the asset’s long-term legitimacy.
Market Sentiment and Price Action
The anticipation of ETF approvals has already begun to influence market dynamics for both Litecoin and XRP.
Soaring Approval Odds
On Polymarket, a popular prediction market platform, the odds for both ETFs being approved in 2025 have soared. At the time of the filing:
- The chance of an XRP ETF gaining approval was trading at 81%.
- The chance of a Litecoin ETF approval was also at 81%, representing a massive 41% jump over the previous month.
These figures highlight the market’s growing optimism following Nasdaq’s formal involvement.
Litecoin Price Rally
Litecoin’s price has reacted positively to the news. Recently, LTC witnessed a rally of approximately 9%, breaking past the $117 mark. This surge is directly attributed to the growing speculation of an imminent ETF approval.
Technical analysts are watching the price action closely. Some, like analyst Carl Moon, suggest that Litecoin has broken out of a bullish ascending triangle pattern, potentially setting its sights on a next target near $128. At the time of writing, Litecoin is trading around $118, reflecting strong bullish momentum.
For those looking to track these developments and analyze market trends in real-time, you can explore real-time market analysis tools to stay informed.
Frequently Asked Questions
What is a 19b-4 filing?
A 19b-4 is a form filed with the SEC by a self-regulatory organization (like Nasdaq) to propose a rule change necessary for listing a new type of security, such as an ETF. It is a critical step in the ETF approval process.
Why might a Litecoin ETF be approved before an XRP ETF?
Litecoin is largely viewed as a commodity by U.S. regulators and is not facing any major ongoing lawsuits. XRP, however, is still dealing with legal uncertainty from the SEC's appeal in its case against Ripple Labs, making its regulatory path less clear.
How do ETF approvals affect cryptocurrency prices?
ETF approvals typically have a bullish effect on prices. They provide a new, easy, and regulated channel for institutional and retail investors to gain exposure to the asset without directly buying and storing it, significantly increasing potential demand.
Who is CoinShares?
CoinShares is a leading European digital asset investment firm managing billions in assets. They offer a suite of financial products, including ETFs, and are seeking to bring their expertise to the U.S. market with these filings.
Does Nasdaq’s filing guarantee the ETFs will be approved?
No, the filing does not guarantee approval. It initiates a review process by the SEC, which will evaluate the application based on regulatory compliance, market manipulation concerns, and investor protection criteria. The final decision rests with the SEC.
What is the difference between a spot ETF and a futures ETF?
A spot ETF holds the actual underlying cryptocurrency (e.g., LTC or XRP). A futures ETF holds contracts that bet on the future price of the asset. The recently filed CoinShares products are proposed as spot ETFs.