ETF analyst Eric Balchunas says Canary Capital’s filings for spot Litecoin and HBAR funds are seemingly finalized, but the government shutdown will delay their launch.
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Asset manager Canary Capital appears to be on the cusp of having its Litecoin and HBAR exchange-traded funds (ETF) approved after filing key final details, but they’re unlikely to launch while the US government is shut down.
Canary to its Litecoin () and Hedera () spot ETFs on Tuesday, which each added a fee of 0.95% and the ticker “LTCC” for its Canary Litecoin ETF and the ticker “HBR” for its Canary HBAR ETF.
Bloomberg ETF analyst Eric Balchunas in an X post on Tuesday that the additions are “typically the last thing updated [before] go-time.”
He added that with the US government shut down and the Securities and Exchange Commission largely dark, it’s unknown when they’d be approved, but the filings “look pretty finalized to me.”
Fellow Bloomberg ETF analyst James Seyffart also thought the amendments are a good sign that an approval would happen and it “feels like Litecoin and HBAR ETFs are at the goal line here.”
Analysts from the that the approval of altcoin-tied ETFs could spark a new altcoin rally, as the product would open up investors to the tokens.
Fees higher than spot Bitcoin ETF, but “pretty normal”
Spot Bitcoin ETFs fees average between 0.15% and 0.25%, to Ledger, compared to Canary’s 0.95% fees, but Balchunas that is not out of the ordinary.
“My take on the 95bp fee. It’s pricey vs spot BTC, but pretty normal to see higher fees for areas that are new to being ETF-ed and increasingly niche,” he said.
However, he also noted that if the LTC and HBAR and interest from investors, other issuers could try to undercut Canary and compete with cheaper products.
Issuers’ “spaghetti cannon” 3x ETFs despite shutdown
The US government might be in shutdown, but companies are still , according to Balchunas and Seyffart, with a focus on funds with 3x leverage.
A 3x ETF is a fund that a wide variety of assets, such as stocks, and applies leverage to gain three times the daily or monthly return. In the past, the SEC has rejected or failed to approve high-leverage crypto ETFs due to concerns about investor protection related to volatility and complexity.
ETF issuer Tuttle Capital for 60 new 3x ETFs. Another ETF issuer, GraniteShares, also a batch of ETF applications holding a range of assets, including Bitcoin () and Ether (). ProShares also the fray with a slew of filings.
Balchunas there are close to 250 3x ETF filings, and issuers “spaghetti cannon” so many at once because they “make good money.”
“The degens are hungry and fee insensitive,” he added. “Powerful combo in capitalism.”
Balchunas that such ETFs create a 2x leverage using swaps, but will then “use options to target an extra 1x.”
Goverment shutdown leaves ETF approvals in limbo
The crypto industry was set for a , with the SEC supposed to make their final decisions on 16 crypto ETFs throughout the month.
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New listing standards were , which could expedite spot crypto ETF approvals, as each application would no longer need to be assessed individually, reducing approval timelines.
The government shutdown, which began on Oct. 1, has left everything in limbo, with . The SEC on the same day as the shutdown it would continue to operate but with a skeleton crew.
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