Litecoin (LTC) is positioned to potentially see significant inflows if it gains approval for its own exchange-traded fund (ETF), with forecasts suggesting that the product could draw in as much as $580 million. This estimation is based on the market adoption rate observed in Bitcoin ETFs, where approximately 6% of Bitcoin’s supply is currently held within various ETFs.

Canary Capital, a digital asset-focused firm, appears to be the most likely entity to issue the Litecoin ETF. The company initiated its filing in October, and recently, Nasdaq filed a 19b-4 form for the Litecoin ETF with the U.S. Securities and Exchange Commission (SEC), signaling that the regulatory review process is now underway.

Litecoin, a fork of Bitcoin with a similar Proof of Work consensus mechanism, shares several key technical features with Bitcoin. This similarity has led analysts to speculate that Litecoin could be considered a commodity by the SEC, a designation that would align it more closely with Bitcoin and increase the likelihood of approval for its ETF.

Despite growing optimism, the success of a Litecoin ETF will ultimately depend on investor demand. While analysts predict that the product may not generate the same level of hype as Bitcoin or Ethereum ETFs, there is still a strong potential market for such an offering, particularly if it is well-executed.

Bitcoin ETFs, especially the BlackRock iShares Bitcoin Fund (IBIT), made history by becoming the most successful ETF launch in U.S. history, far exceeding initial expectations. Analysts like James Seyffart from Bloomberg and Kenneth B. Worthington from JPMorgan are optimistic about Litecoin’s chances, but they also emphasize that the market will ultimately decide whether the product succeeds or not.

Bitcoin ETFs currently account for around 6% of Bitcoin’s total market capitalization, while Ethereum ETFs hold about 3% of Ethereum’s market cap. These figures have served as benchmarks for estimating the potential inflows of other cryptocurrencies, including Solana (SOL) and XRP, with projections totaling up to $14 billion in combined assets under management (AUM).

Based on these trends, Litecoin’s ETF could realistically attract anywhere from $290 million to $580 million in its first year. While this amount would be considerably smaller than the massive sums garnered by Bitcoin or Ethereum ETFs, it would represent a significant milestone for Litecoin, which has a market capitalization of approximately $9.6 billion. This influx would further establish Litecoin as a strong player in the cryptocurrency space.