Diverging ETF impacts for Solana and Litecoin

K33 Research has identified what could be a compelling trading opportunity if the SEC approves altcoin ETFs in October. Vetle Lunde, the firm’s Head of Research, suggests that a “long SOL, short LTC” position might make sense based on how Grayscale’s existing trusts have behaved.

The reasoning comes down to supply dynamics. Grayscale’s Solana trust, which started trading in 2023, represents just 0.1% of the circulating SOL supply. It’s never traded below its net asset value either, which means there’s minimal risk of excess supply hitting the market if it converts to an ETF.

Litecoin faces different pressures

Litecoin’s situation looks quite different. Grayscale holds about 2.65% of LTC’s circulating supply through its trust. That trust traded at steep discounts during the 2022 bear market and for much of 2025. When you combine the larger holding percentage with that history of trading below NAV, there’s potential for significant outflows if the trust converts to an ETF.

Lunde notes they’d likely wait a few days after any ETF launches before acting. Litecoin has shown sharp reactions to positive news in the past, so timing matters here.

Fewer offsetting flows for Litecoin

Another factor working against Litecoin is the smaller number of ETF filers. For Bitcoin and Ethereum ETFs, multiple issuers helped offset Grayscale’s outflows with their own inflows. But for Litecoin, only three firms have filed – Grayscale, Canary Capital, and CoinShares. That means fewer potential buyers to absorb any selling pressure from Grayscale’s conversion.

Solana doesn’t face this same constraint, though the report doesn’t specify how many firms have filed for SOL ETFs.

October decision timeline

The SEC is expected to make decisions on Litecoin and Solana ETF filings in early October, with other fund decisions coming later in the month. The regulator recently approved generic listing standards for crypto ETFs, which some see as a positive signal.

Current prices show SOL trading around $210 (down 2% over 24 hours) and LTC at $107 (up 0.1%). The divergence in their recent performance might already be reflecting some of these expectations.

I think the analysis makes sense from a supply perspective, but market sentiment can sometimes override these technical factors. Still, it’s interesting to see how the different histories of these Grayscale trusts could create such distinct outcomes if ETFs get approved.