Canary Capital is about to get the green light to launch its ETFs for Litecoin and HBAR. The company has submitted final documents with key amendments, including fees and tickers. However, since the US government has partially shut down, the launch is delayed.
On Tuesday, Canary filed updates for its spot ETFs on Litecoin and Hedera. They added a fee of 0.95%, as well as tickers: LTCC for the Litecoin fund and HBR for the HBAR fund.
According to Bloomberg analyst Eric Balchunas, such updates are usually filed at the very end—when everything is ready for launch.
He added that due to the shutdown and lack of activity from the SEC, it is still unclear when exactly the funds will be approved. Nevertheless, he said the documents “look final”.
Another Bloomberg analyst, James Seyffart, is also confident that this is a positive signal. He believes that ETFs for Litecoin and HBAR are at the final stage.
Back in August, Bitfinex analysts suggested that approval of such ETFs could spark a new altcoin rally, as it would open access to tokens for a wider range of investors.
Fee higher than bitcoin ETFs, but within the norm
The average fee for spot bitcoin ETFs ranges from 0.15% to 0.25%, according to Ledger. In comparison, Canary’s funds have a fee of 0.95%. However, according to Eric Balchunas, this is quite expected.
“Yes, 0.95% is expensive compared to bitcoin. But for new and niche assets, such a fee is more the standard than the exception,” he explained.
At the same time, Balchunas added that if the Litecoin and HBAR funds show good volumes and attract investor interest, other managers may try to enter the market with lower fees to compete with Canary.
Despite the shutdown, companies are churning out 3x leveraged ETFs
Although the US government is still in shutdown mode, this does not prevent issuers from continuing to file applications for new ETFs. According to Bloomberg analysts, the main focus now is on funds with triple leverage.
3x ETFs are instruments that track the behavior of an underlying asset, such as stocks, but amplify returns threefold through leverage. Such funds are considered risky, and the SEC has previously rejected crypto versions due to concerns about volatility and complexity.
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Nevertheless, companies keep trying. For example, Tuttle Capital filed applications for 60 new ETFs with x3 leverage. GraniteShares also submitted a batch of applications, including for funds with BTC and Ethereum. ProShares also joined in and submitted several proposals.
Balchunas estimated the total number of applications for such funds at around 250 and joked that issuers are firing them like from a “spaghetti cannon”—the more applications, the higher the chance of success.
“Those chasing profits don’t really care about fees. It’s a powerful combo for capitalism,” he noted.
He explained that such funds create a base leverage of x2 through swaps, then add another x1 via options.
The launch of new ETFs stalled due to the shutdown
October was supposed to be a key month for the crypto industry—SEC planned to make decisions on 16 crypto ETFs at once. In addition, new listing standards were announced in September that could speed up application approvals: thanks to the changes, the commission no longer needs to review each application separately, which shortens the timeline.
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But after the shutdown began on October 1, all processes were frozen. Deadlines are passing, but no decisions are being made. SEC stated that it will continue to operate, but with a limited staff, and this is noticeably slowing down all processes.
