K33 Research highlights the emerging opportunity presented by spot altcoin ETFs, focusing on Solana (SOL) and Litecoin (LTC) as key assets likely to experience divergent impacts upon ETF approvals.
Currently, eight issuers have filed for spot Solana ETFs, with the US SEC actively engaging by requesting updates to incorporate staking provisions—potentially making Solana and Ethereum ETFs uniquely integrated with native staking functionalities. Conversely, ETF proposals also exist for Litecoin, XRP, and Dogecoin; however, the probability of approval varies considerably across these assets.
K33 analyst Vetle Lunde contrasts the dynamics between Solana and Litecoin trusts managed by Grayscale Investments. The Solana Trust, launched in 2023, controls only 0.1% of the total SOL supply and has never traded at a discount, suggesting lower risk of significant market disruption if converted into an ETF. In comparison, the Litecoin Trust holds 2.65% of LTC supply and has a history of trading at a discount, implying a higher risk of redemption-driven selling pressure during an ETF transition.
Lunde recommends a strategic approach of going long on SOL and short on LTC post-ETF launch, citing Solana's cleaner trust profile and lower liquidity risks versus Litecoin's potential volatility, similar to past Grayscale Bitcoin and Ethereum trust conversions. This view is supported by the fewer Litecoin ETF filings and structural differences in supply control.
Additionally, K33 announced raising SEK 85 million (~$8.9 million) to expand its Bitcoin treasury aimed at acquiring 1,000 BTC as part of a long-term corporate strategy. Previous fundings have resulted in 25 BTC purchases to date, emphasizing the firm’s bullish stance on Bitcoin's role in finance.