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There’s been a lot of news surrounding the surge of cryptocurrency recently. With mass bailouts coming from governments around the world, and many questioning the stability of the stock market (understandably), people have been looking into cryptocurrency at record rates. The attractiveness of a decentralized currency would seem to be the major pull, but other news such as the imminent split of Bitcoin is creating plenty of buzz among crypto enthusiasts.
While there’s so much hype and news around this right now, there’s been a bit of uncertainty about the future of Litecoin and where it fits into all of this. This is exactly what we’ve addressed in this short piece.
What actually is Litecoin?
Litecoin is described as an open-source cryptocurrency (list of cryptocurrencies), and it first came to fruition back in 2017. It was developed with the intention of being a quicker alternative to Bitcoin, and when you look through the white paper of this coin, the technical details are amazingly similar to Bitcoin. For that exact reason, many would think that Litecoin would perform and react in a very similar way to Bitcoin in the market, but as we can see, that isn’t the case.
At the time of writing, Litecoin is still ranked inside the top 5 cryptocurrencies on Coin Market Cap, and this figure is based on the amount that is in circulation. There are literally billions invested in Litecoin as it currently stands, so it shows that there is strong investment interest right now. What’s cool about Litecoin is that it can be mined almost 4 times quicker than Bitcoin, meaning that more enter the supply at a much quicker rate than Bitcoin.
Now, this is where the uncertainty has stemmed from in the first place. If you look at the 1-year graphs for the performance of Litecoin, things certainly aren’t looking too good. Litecoin was approximately $140 at its highest point over the last year, and today it is floating beneath $50. Obviously that’s quite a large dip in performance, although, on the flip side, there are still billions invested in Litecoin in 2020.
In contrast, when you look at the performance of Bitcoin, it did dip below $5000 when the coronavirus impact hit the world, yet it is now floating close to $10,000. Bitcoin has also shown far more stability in the last 8 weeks or so compared with Litecoin, which has many investors questioning whether Litecoin really is a good investment.
Those cryptocurrency optimists will claim that Litecoin is an absolute bargain right now, as it is way below the highest point that it has been. If this was a stock and a company had solid financials, we’d tend to agree, but given that cryptocurrency is still somewhat speculative, Litecoin is risky indeed.
The future of Litecoin
Coming back to the main object of this article – is Litecoin here to stay? We would be inclined to say yes, as the white paper and proof of concept has already stood many testing times in recent years. We are also optimistic as many larger investment banks have started to voice approvals for cryptocurrency in general, so the future shouldn’t be looking all that bleak. Trends within the online gaming industry are often used as strong indicators not only for technical and mobile developments but also financial. We saw this with Bitcoin where online casinos were the first global industry to support Bitcoin and forced the general e-commerce industry to follow. The same development can be seen now for other cryptocurrencies. Litecoin is today considered a safe and instant payment method at several gaming sites (list of Litecoin casinos) and more industries will follow. With this said, Litecoin will probably experience some turbulent times over the coming months just as we have seen with Bitcoin and other cryptocurrencies during the COVID-19 pandemic.
Since the price is lower than $50 at the time of writing, it would be unreasonable to assume that the price will just continue to decline. It’s still used to pay for products and services online, and it has the same benefits that other cryptocurrencies have like anonymity and additional protection. We have a feeling that following the Bitcoin halving that is about to occur, Litecoin could well make a resurgence, although only time will tell.
The interesting thing about cryptocurrencies is that there is rarely anything substantial that is dictating the price. Unlike stocks and other commodities, the price is usually tied to some form of an underlying asset, but that isn’t strictly the case with cryptocurrencies. It is now common knowledge that rapid price swings are usually a result of ‘whales’ dumping their shares or plowing money into certain coins, but ultimately, the price represents investors’ confidence in the future benefit of the asset.
We believe that Litecoin still serves a major purpose in today’s world, and it is far less complex and more agile than Bitcoin in many respects. For these reasons among others, Litecoin should be here to stay, and the price should start to reflect that over the coming months. For users Litecoin is still mostly accepted by the online gaming industry and currency exchange businesses but more e-commerce shops are joining (list of Litecoin Businesses) and we expect the list to grow substantially during 2020.