Litecoin (LTC): Why Charlie Lee Selling Will Help in the Long Run

Litecoin (LTC): Why Charlie Lee Selling Will Help in the Long Run

Litecoin (LTC): Why Charlie Lee Selling Will Help in the Long Run

Litecoin (LTC)–Several weeks ago Charlie Lee, creator of Litecoin, announced on Twitter and in a Reddit post that he would be selling and donating all of his LTC holding. Naturally, the move was met with equal parts derision and admiration, with many of the former feeling that Charlie was taking an opportunistic moment to cash out. However, in the long run, Litecoin will benefit from not having a central figure of authority, similar to how Bitcoin has flourished in the absence of Satoshi Nakamoto.

Justified Backlash

There are reasons to be upset and suspicious of Charlie Lee’s actions. The first and most obvious is that the selloff occurred at a peak in Litecoin pricing. The announcement happened while Litecoin was trading at 350 USD, over five times the price from the month before. Lee’s selloff directly led to the creation of uncertainty in the currency, with the price falling 15% to 300 USD. This left bewildered LTC holders not only confused by Lee’s decision but also suffering the financial ramifications. Lee’s announcement also immediately preceded the rise of Bitcoin Cash and the collusion-like actions of Coinbase, which brought in a fresh wave of accusations towards his motives. As if that weren’t bad enough, the entire cryptomarketplace fell 200 billion USD in the days following the announcement, with Litecoin briefly dropping below 200 USD.

Whether you support Bitcoin Cash or not, Roger Ver’s heavy-handed antics are at best confusing and at worst manipulative. It’s possible history will look back on Roger Ver’s tactics as a man driven to see his vision of Bitcoin come to reality. But we’re talking about money, lots of it, and for most people the zealous attitude comes across as suspicious. When the person who has the most to gain is also talking the loudest, it’s natural to question the validity of the product. Charlie Lee saw what was happening with BCash, with the massive outcry of foul play over the Coinbase listing and the claims of insider deals, and wanted no part of that tainting the Litecoin project.

Removal of a Figurehead

All of the claims of cryptocurrency being a ponzi scheme are that much more apparent when there is a singular figure to point to at the top of the pyramid. Bitcoin benefits in an enormous way from the anonymity of its creator Satoshi Nakamoto. Satoshi must have developed this conclusion early on, and guarded his identity as a way to prevent distraction from the ultimate goal of cryptocurrency.

The real villain in Charlie’s case is media and general public perception. We don’t know the exact amount of LTC that Charlie was holding at the time he made his decision, but it’s safe to assume it was a large amount. Well-founded investigative efforts peg the creator of Bitcoin to be in possession of 1 million BTC. If Charlie held even half that amount, he was sitting on a fortune of $175 million in Litecoin alone.

Let’s imagine a world where cryptocurrency is as ubiquitous in financial news as any other asset. Every time the price of LTC goes up, we can imagine the wave of articles relating how much more money Charlie Lee is making. Ripple suffered a similar fate at its all-time high of 3.80 USD, with Forbes and other popular outlets publishing repeated articles about how rich Ripple founders had become. The general public fascination with the amount of money being made in crypto is not good for the long term success of the currency. While it brings attention to crypto and gets new investors interested, it also creates an atmosphere of mistrust and jealousy. In the U.S., there is a significant media slant towards the implosion of Bitcoin, Litecoin and the rest. Every small downtick in price is published on a front page with the hope that the crypto bubble is finally bursting. Charlie Lee was in a similar position to draw negative attention to Litecoin if the media started latching on to how his personal gain correlated with that of LTC. Every talk show interview about the benefits of buying and using Litecoin would be shrouded with the accusation of ponzi scheme and personal gain. In response, Charlie took the route that seemed inevitable for the long term growth of Litecoin and made his financial stake impartial to that of Litecoin.

Company Deals

Charlie’s selloff also puts him in a better position to make deals with companies to grow LTC adoption. Most people don’t have a problem with founders putting a positive spin on their brand in an attempt to help it grow. It happens all the time with CEOs. Nobody accuses Mark Zuckerberg of wanting to make more money when he promotes the features of Facebook. It’s just capitalism. But crypto is new enough and foreign to traditional business that companies are going to be wary of their new partners. Imagine you own an internet commerce site looking to start accepting cryptocurrency. You have to decide which is the right currency for long-term payoff while still providing immediate usability. You have a host of players at the table, but you also know that the founders of these currencies have the most to gain by making the deal. In fact, you may be losing money on the deal, but the founder still has the option to cash out at any time. It’s a precarious place to be, and one made all the more difficult with founders and early-adopters holding so much power over their currency.

Trust in Charlie

Charlie is now completely removed from the conflict of interest that comes from pushing Litecoin. We have to take his word that he believes in his currency enough to continue working tirelessly to see it grow, even at the expense of personal gain.That’s a bargain most people should be willing to accept. Charlie has been in the cryptosphere long enough that he is probably more wealthy from Bitcoin than he ever would be from holding Litecoin. It’s counter intuitive to our capitalist society, but it’s possible Charlie felt that he would be better off without the burden of LTC’s price weighing on his decision and performance. Likewise, he came to the conclusion that having his tweets/announcements on LTC directly correlate with price moves was a myopic approach to his currency. Look at what’s happening now with John McAfee and his cryptocurrency “picks.” Every coin he tweets or mentions experiences a surge in price with no actual substance behind the appreciation. This has the effect of creating resentment and, to use an all-too-common phrase, the conditions for a bubble. Eventually people will become fatigued, both in interest and dollars, at the incessant news that’s pumping the price of these coins. Cryptocurrency is still in such an adolescent stage and foreign to public sensibility that we need to be creating genuine value and trust in the public. Seeing the price of LTC surge because Charlie hints at new developments only increases the speculative nature and hinders the goal of long-term adoption. It’s interesting that much of blockchain and crypto in general hinges upon creating a system of commerce with greater trust and less dependency on corruptible, centralized figures. And yet, to the general public, most of the discussion surrounding Bitcoin, Litecoin, etc. is as a ponzi scheme, a currency for illegal activities and tax evasion, and an asset without substance–all agents of mistrust, fear, uncertainty and doubt.

Long Term Ramifications

Charlie’s selloff almost certainly contributed to the narrative of uncertainty and downturn in value, but in the long-run he has positioned Litecoin to benefit from his decision. You can no longer say that Charlie is tweeting news to pump the price of LTC. You can no longer say that he is exaggerating claims or promoting Litecoin above other cryptocurrencies for personal gain. He has now become what a true political figurehead is supposed to be: someone with a strong interest in improving the well being of his constituency, but removed from the equation financially. And for those claiming that crypto is better off decentralized and without leadership or monarch-founders, here is your opportunity. Charlie is now free to fade into obscurity, and the only way Litecoin suffers is from having one less high-profile figure to talk about it. The torch has been passed. Charlie has said he is committed 100% to the success of Litecoin and the evolution of the project. For those feeling betrayed, who still have a financial stake in LTC while the creator does not, do more. You are responsible for your investment decisions. You are responsible for the products you adopt. Don’t blame Charlie for hurting Litecoin. He created it. He gave it to you in the first place. If you believe in Litecoin, if you feel strongly that it has the opportunity to be a dominant currency and factor in the future of commerce, then start promoting it yourself. Start doing the work that’s going to help Litecoin achieve that realization. It’s not Charlie who has given up on Litecoin. It’s the people expecting others to make them rich without contributing to the system.

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