Diverging ETF Impact on Solana and Litecoin
K33 Research suggests that Solana and Litecoin could experience very different market reactions if the SEC approves altcoin exchange-traded funds. Vetle Lunde, Head of Research at K33, pointed out in a recent report that a “long SOL, short LTC” trading strategy might make sense if these ETFs get the green light.
The reasoning comes down to how Grayscale’s existing trusts have behaved. Grayscale’s Solana trust, which started trading in 2023, represents just 0.1% of the total SOL supply. It has never traded below its net asset value, which means there’s little risk of excess supply hitting the market if it converts to an ETF.
Litecoin’s Potential Supply Pressure
Litecoin presents a different picture entirely. Grayscale’s Litecoin trust has been around longer and traded at steep discounts during the 2022 bear market and for much of 2025. Grayscale holds about 2.65% of LTC’s circulating supply, which is a significant amount compared to their SOL holdings.
Given this history of trading at discounts, the Litecoin trust could see substantial outflows if it converts to an ETF. This creates potential supply pressure that doesn’t exist with Solana.
Timing the Trade
Lunde suggests waiting a few days after any ETF launches before executing the trade. Litecoin has shown sharp reactions to positive news in the past, so there might be an initial price spike that could create better entry points for the short position.
The situation reminds me of what happened with Bitcoin and Ethereum ETFs last year. Grayscale saw intense outflows from their existing trusts, but inflows into other products largely offset this pressure. The problem for Litecoin is that there are fewer issuers in the mix—only three have filed for LTC ETFs compared to the crowded field for Bitcoin and Ethereum.
Market Context
This analysis comes as the SEC has approved generic listing standards for crypto ETFs. The regulator is expected to make decisions on Litecoin and Solana ETF filings in early October, with other funds following later in the month.
Currently, Solana trades around $210 while Litecoin sits at about $107. Both have been relatively stable recently, with SOL down 2% and LTC up 0.1% over the past day. But if ETFs get approved, we might see these trends diverge significantly based on the supply dynamics K33 has identified.
It’s interesting to think about how different assets can react to what seems like similar news. The market structure and existing positions really matter, not just the headline approval itself. I suppose that’s why professional research like this can be valuable—it digs into the mechanics that casual observers might miss.
