Grayscale Files Again to Convert Litecoin Trust Into an ETF, More Than a Year After a Competitor Already Beat It to Market

Grayscale Investments filed an amended Form S-3 registration statement with the SEC on September 11, 2026, seeking to convert its Grayscale Litecoin Trust into a spot exchange-traded fund and list it on NYSE Arca under the same ticker, LTCN, according to the filing reviewed by Stock Titan. If cleared, the product would be renamed the Grayscale Litecoin Trust ETF.

The trust has traded over the counter since January 2018 without the creation-and-redemption mechanism that lets market makers arbitrage an ETF's price back toward the value of what it actually holds. That absence has produced wild swings. Stock Titan reported the trust has historically traded at premiums to net asset value as high as 5,893%, and that as of September 9, 2026, shares changed hands on OTCQX at $4.01, an 8% discount to NAV.

The fund's size has been shrinking. Crypto Briefing reported the trust held more than $215 million in assets under management in early 2025, falling to roughly $82 million by mid-2026, a decline of about 62%. Startup Fortune, citing the trust's own 10-K filed with the SEC on September 3, 2026, put net assets at $82.3 million as of June 30, 2026, down from $175.9 million a year earlier. Both figures point the same direction even if they start from different months: investor money has been leaving the vehicle. As of that June 30 date, the trust held roughly 1.97 million Litecoin and 24.25 million shares outstanding, according to Crypto Briefing's reading of the filing.

The regulatory path here has been long and, for a while, largely irrelevant to how things actually turned out. NYSE Arca filed a proposed rule change, known as a 19b-4, to list the trust's shares on January 24, 2025, with an amendment following in February, according to both Crypto Briefing and Startup Fortune. But Startup Fortune reported that filing was later withdrawn after the SEC approved generic listing standards for commodity-based trust shares on September 17, 2025. That change let exchanges list qualifying crypto ETFs without a separate rule-change fight for each individual product. The shift effectively reset the clock and made the old 19b-4 process moot.

While Grayscale was working through that process, a competitor got to market first. Startup Fortune reported that Canary Capital's spot Litecoin ETF, ticker LTCC, began listing on Nasdaq on October 28, 2025, with an October 27, 2025 inception date per Canary's own fund page. If Grayscale's conversion clears, it will arrive well over a year after investors already had a spot Litecoin ETF available on a major exchange.

Grayscale has lined up the infrastructure to move fast if approval comes. Crypto Briefing reported the firm entered a new prime brokerage agreement with Coinbase to handle share creation and redemption once NYSE Arca trading begins. Stock Titan's review of the filing shows creations and redemptions would happen in blocks of 10,000 shares, funded through cash orders. In-kind transactions are not yet available, and the sponsor retains discretion to cap cash-order creations without notice.

The shrinking asset base and the fact that a competitor already has a working spot Litecoin ETF on Nasdaq raise questions about why this conversion matters. A sub-scale, aging trust converting into an ETF a year late, tracking an asset that isn't even in the top five by market cap, is not an obvious catalyst for investor demand. That's a fair reading of the numbers Crypto Briefing and Startup Fortune both laid out.

The case for the conversion is structural rather than promotional. An ETF wrapper, once creations and redemptions are functioning, mechanically closes the gap between share price and the value of the underlying coin, something the trust structure never allowed. Grayscale ran the identical playbook with its Bitcoin trust, GBTC, which traded at a persistent discount for years before converting into a spot ETF in January 2024, and again with its Ethereum trust. Whether Litecoin holders get the same outcome depends entirely on whether investors show up once the arbitrage mechanism exists, something a shrinking asset base does not guarantee.

The trust currently charges a 2.5% annual sponsor fee, which Crypto Briefing noted is notably higher than fees on the spot Bitcoin ETFs that launched in the US in early 2024. Nothing in the September 11 filing changes that fee structure.

None of this is finalized. Stock Titan's review states plainly that as of September 11, 2026, NYSE Arca's listing application had not been approved, and Grayscale says it will not make its registration effective or offer shares unless that approval comes through or is no longer required. The SEC and NYSE Arca have not announced a decision date. Until they do, the Litecoin ETF remains a filing rather than a trading product. The next concrete marker to watch is whatever the SEC and NYSE Arca post when their reviews conclude.