Litecoin has its day

You go, Litecoin. Rocking out on a Tuesday, oblivious to the market's somewhat sullen state, Litecoin earlier this morning playfully planted a smooch on $125 following a month straddling $105. LTC hasn't been $125 since March.

The 22nd-largest coin had surged by 14% to $127 in 24 hours as of 7 a.m. (EST). This move shouldn't be that surprising. Traders oftentimes like to rotate into under-appreciated legacy altcoins. And there's always random ETF chatter. Grayscale's application to create a  spot LTC ETF while delayed still looks like it is on track for some form of regulatory resolution in the fall. "Speculation over a spot LTC ETF continues to build," CoinDesk said.

Additional price momentum stems from the Litecoin team's announcement regarding recent merchant activity. In July, LTC accounted for 14.5% of all crypto payments on CoinGate, second only to Bitcoin, according to CoinDesk.

Also, per CoinGecko, No. 47 Mantle (+20%) popped today. And among Big Ten coins, Solana (+5%) distinguished itself. Bitcoin remained flatly $115K.

Spot Ethereum ETFs bled $465M on Monday, marking the biggest one-day outflow since the products came into existence last summer. Monday's outflows followed a period of record weekly inflows for the cadre of spot ETH ETFs over the past three weeks, with inflows totaling more than $4B just in the latter part of July.

Analysts said yesterday's hemorrhage might signal short-term profit-taking, and doesn't necessarily reflect declining institutional interest. (The Block)

In early July, a pair of prominent Bloomberg ETF analysts pegged the odds of eventual approval for a spot Litecoin ETF at 90%. A primary reason for such optimism: the CFTC's classification of LTC as a commodity, a distinction with a difference in that it places the elegantly plain but often overlooked coin alongside BTC and ETH in terms of regulatory clarity for issuers.

A few weeks before that, the Bloomberg duo (Eric Balchunas and James Seyffart) broadly expressed a sense of confidence that the vast majority of spot crypto ETF filings were likely to get the green light by year's end. Procedural engagement from the SEC was a main factor driving their certitude regarding prospects for spot ETFs tied to XRP, Solana, Dogecoin, Cardano, Polkadot and Avalanche.

Last week, the SEC declared a monumental change that could boost institutional take-up of crypto ETFs. The federal regulatory agency said it had authorized the use of less cumbersome "creation and redemption" mechanisms. It's a wonky as hell yet super impactful nuance.

In the world of ETFs, there is a distinct sausage-making process. It involves authorized participants (market making parties) shepherding shares into and out of a big theoretical bucket, hoisting them in batches, picking at them as needed, arbitraging, finessing, scrounging, replenishing, working the always-in-a-state-of-flux carcass, throughout the trading day.

The SEC’s former chair, Gary Gensler, strongly insisted that the creating and redeeming of crypto ETF shares be done using cash only; now, the new SEC Chair Paul Atkins is allowing for "in-kind" construction, removing a barrier to efficiency for market makers, and teeing up, potentially, a "monstrous BlackRock ETF price earthquake," said Forbes Digital Assets' Billy Bambrough.

The SEC also approved a Nasdaq proposal to increase a position limit for options on BlackRock’s IBIT to 250,000 contracts, up from 25,000. This development is expected to "help bring in bigger institutions,” Bloomberg's Balchunas posted to X.

Both of these seismic structural moves benefit the biggest gorilla in the game with enormity mattering. (Sorry, smaller, secondary players).

Some have warned, said Forbes' Bambrough, that overly favorable rules could wind up giving BlackRock "outsized control over the network."

As it stands, BlackRock’s IBIT fund holds 3.5% of the 21 million BTC that will ever exist.