YEREVAN (CoinChapter.com) — Litecoin (LTC) price has experienced a steep decline against Bitcoin, losing over 98% of its value in the LTC/BTC trading pair since 2013. As of October 2024, Litecoin remains in a long-term downward trend. Despite its early prominence as a Bitcoin alternative, Litecoin has struggled to maintain its market position.
The ongoing decline in Litecoin’s value compared to Bitcoin highlights the significant gap between the two cryptocurrencies. While Bitcoin continues to dominate the market, Litecoin’s performance has failed to attract sustained interest from investors.
Canary Capital’s ETF Filing and Litecoin’s Short-Term Price Surge
On October 16, 2024, Litecoin saw a sharp rise in price following news of an ETF filing by Canary Capital Group. This ETF announcement triggered a surge in Litecoin’s price. The cryptocurrency climbed by over 9.5% in 24 hours, reaching above $73. Canary Capital, led by Steven McClurg, filed paperwork to launch a Litecoin ETF in the U.S. This created a brief wave of optimism among traders. At the moment, Litecoin’s price is $70.55.
However, despite this price boost, the long-term impact of the ETF filing remains uncertain. Canary Capital is a smaller player compared to major firms that have backed Bitcoin ETFs. This limits the potential for significant institutional investment in Litecoin, as larger firms like BlackRock and Fidelity were crucial in driving institutional interest in Bitcoin.
Institutional Interest in Litecoin ETF Remains Unclear
Historically, ETF filings for other cryptocurrencies, such as Ethereum, have shown that initial enthusiasm does not always lead to sustained price growth. Ethereum’s price rallied by 30% before its ETF launch, only to fall by over 25% afterward due to fund outflows. Litecoin faces a similar challenge, as it does not have the same level of adoption or market narrative as Bitcoin or Ethereum.
![ETH: US Spot ETF Net Flows [August–October 2024] — Source: Glassnode](https://coinchapter.com/wp-content/uploads/2024/10/glassnode-studio_eth-us-spot-etf-net-flows-eth-1-1.png)
Litecoin’s lower adoption rate, combined with Canary Capital’s smaller market presence, raises questions about the ETF’s ability to attract large-scale institutional interest. Without the backing of major financial institutions, the likelihood of strong capital inflows into Litecoin remains limited.
Grayscale Litecoin Trust Could Add Selling Pressure
Another potential factor affecting Litecoin’s future price is the Grayscale Litecoin Trust (LTCN). Similar to the Grayscale Ethereum Trust, which was converted into an ETF, this trust could add selling pressure if it undergoes a similar conversion. High fees and investor outflows from Grayscale products have previously contributed to price declines in other cryptocurrencies, and Litecoin could face the same risks.
Grayscale’s conversion of the Ethereum Trust into an ETF under the ticker ETHE led to significant outflows. This, in turn, affected Ethereum’s price. If Grayscale chooses to convert its Litecoin Trust, Litecoin could experience similar outflows, adding downward pressure on the price.
