On June 18, digital asset brokerage and research firm K33 said that as the U.S. Securities and Exchange Commission (SEC) becomes more crypto-friendly, it may approve the launch of new spot altcoin ETFs in the coming months, which will provide investors with some compelling long-short strategy opportunities. Eight institutions have already submitted applications for spot Solana (SOL) ETFs, and the SEC has reached out to asset managers to ask them to include staking clauses in their updated filings. K33 analyst Lunde noted that this indicates that regulator involvement is increasing and increases the likelihood that Ethereum and Solana ETFs may include staking features. In addition, in addition to Solana, there are ETF applications for other crypto assets such as LTC, XRP, and DOGE. Lunde mentioned that there was a so-called "grayscale effect" when Bitcoin and Ethereum ETFs were listed, that is, after Grayscale's trusts were converted into ETFs, a large number of their holdings flooded into the market, causing more than 50% of AUM to be sold off within 200 days. However, for potential new ETF assets, the situation is different for Grayscale. Unlike XRP and Dogecoin, Grayscale's Solana and Litecoin trusts are already traded in the open market, so they can serve as a more straightforward reference. Lunde said that Grayscale's Solana trust, which was launched in 2023, has never traded at a discount and only holds 0.1% of the total SOL supply, so the risk of a market sell-off is low. In contrast, Grayscale's Litecoin Trust regularly trades at a discount, holding 2.65% of the total LTC supply, and is again facing discount pressure after the recent physical subscription. In addition, only two institutions, Canary Capital and CoinShares, have applied for the Litecoin ETF at the moment, which means that market liquidity may be low, making it difficult to absorb potential selling pressure. Lunde believes that the structure of the Solana ETF is clearer, while the Litecoin product may face outflows like GBTC and ETHE converted. As a result, a trading strategy of going long SOL and shorting LTC at the same time after the ETF launch may be attractive, especially if both are listed at the same time.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
K33: After the launch of the SOL ETF, it will be difficult to see a wave of dumping, whereas the LTC ETF is the opposite.
On June 18, digital asset brokerage and research firm K33 said that as the U.S. Securities and Exchange Commission (SEC) becomes more crypto-friendly, it may approve the launch of new spot altcoin ETFs in the coming months, which will provide investors with some compelling long-short strategy opportunities. Eight institutions have already submitted applications for spot Solana (SOL) ETFs, and the SEC has reached out to asset managers to ask them to include staking clauses in their updated filings. K33 analyst Lunde noted that this indicates that regulator involvement is increasing and increases the likelihood that Ethereum and Solana ETFs may include staking features. In addition, in addition to Solana, there are ETF applications for other crypto assets such as LTC, XRP, and DOGE. Lunde mentioned that there was a so-called "grayscale effect" when Bitcoin and Ethereum ETFs were listed, that is, after Grayscale's trusts were converted into ETFs, a large number of their holdings flooded into the market, causing more than 50% of AUM to be sold off within 200 days. However, for potential new ETF assets, the situation is different for Grayscale. Unlike XRP and Dogecoin, Grayscale's Solana and Litecoin trusts are already traded in the open market, so they can serve as a more straightforward reference. Lunde said that Grayscale's Solana trust, which was launched in 2023, has never traded at a discount and only holds 0.1% of the total SOL supply, so the risk of a market sell-off is low. In contrast, Grayscale's Litecoin Trust regularly trades at a discount, holding 2.65% of the total LTC supply, and is again facing discount pressure after the recent physical subscription. In addition, only two institutions, Canary Capital and CoinShares, have applied for the Litecoin ETF at the moment, which means that market liquidity may be low, making it difficult to absorb potential selling pressure. Lunde believes that the structure of the Solana ETF is clearer, while the Litecoin product may face outflows like GBTC and ETHE converted. As a result, a trading strategy of going long SOL and shorting LTC at the same time after the ETF launch may be attractive, especially if both are listed at the same time.