Certain cryptocurrencies zoomed higher today as rumors swirled about the potential for new spot crypto exchange-traded funds (ETFs). Spot ETFs previously served as powerful catalysts for the largest cryptocurrencies, Bitcoin and Ethereum.
As of 10:23 a.m. ET, the price of Cardano (CRYPTO: ADA) had shot 12.5% higher from the late afternoon yesterday, Litecoin (CRYPTO: LTC) traded 5% higher, and the meme token Dogecoin (CRYPTO: DOGE) was up 1.5%.
President Donald Trump's pro-crypto administration has significantly increased expectations for new possibilities in the crypto world, including the addition of more spot crypto ETFs. Spot crypto ETFs mirror the price of one cryptocurrency by actually buying and storing the cryptocurrency and then issuing a certain number of shares based on the number of tokens they own. ETFs are considered very liquid, so crypto spot ETFs are likely to increase overall exposure to a token.
Recently, the well-known crypto investment firm Grayscale filed an application to list a Cardano ETF on the New York Stock Exchange, surprising some who didn't consider such an ETF a possibility. Additionally, analysts from Bloomberg Intelligence are now placing high odds of firms rolling out crypto ETFs for Litecoin and even Dogecoin.
James Seyffart, a Bloomberg Intelligence ETF analyst who correctly predicted spot Bitcoin ETFs, recently said he sees a 90% chance of a Litecoin ETF over the coming months and a 75% chance for a Dogecoin ETF.
"We're putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now," Seyffart said. "Big implications/expectations in these odds are that Filings will be acknowledged. Likely this week for XRP and Dogecoin."
Seyffart added that, aside from Litecoin, the odds of any of these ETFs receiving approval would have been very low if the Democrats still controlled Congress, so crypto firms clearly think the time is now. While the Securities and Exchange Commission (SEC) has taken steps to show that the agency is more crypto-friendly, Trump's nominee to lead the SEC, Paul Atkins, still may not receive approval until April. Atkins is a former SEC commissioner who recently led a consulting firm that helps clients navigate the financials and crypto sectors.
As of this morning, the rise of Cardano, Litecoin, and Dogecoin seemed to be an outlier in the crypto sector, so the ETF news is clearly a big reason. Getting a spot crypto ETF turned out to be very bullish for Bitcoin and Ethereum, so I would expect all three of these tokens to react favorably as more news emerges around these developments.
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Cardano trades on a crypto network believed to be one of the most technically sound. The network can supposedly process 9,900 transactions per second. For this reason, I think investors can buy Cardano, although I wouldn't recommend too big of a position just yet due to its volatility. While I do have a small position in Litecoin left from a while ago, I don't have much interest in this token or Dogecoin at this time.
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Bram Berkowitz has positions in Bitcoin, Ethereum, Litecoin, and XRP. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.
Why Cryptocurrencies Cardano, Litecoin, and Dogecoin Are Rising Today was originally published by The Motley Fool
