Litecoin: Time to Be Bullish on LTC
Litecoin (LTC)–We’ve weathered the storm. For now.
While the crypto market is struggling to break out of the worst downturn in price since 2014, one of the few currencies to turn a profit is also one of the most well-known: Litecoin. The announcement of Litepay being launched in the coming weeks is driving the price up despite a downturn in BTC pricing (again), in addition to a growing appreciation for Litecoin as a feasible digital currency.
Here are some reasons why now is a great time to be bullish on the future of Litecoin and LTC pricing.
Why is Cryptocurrency Suffering?
It’s hard to peg the bear market conditions on a single factor. January 2018 has been the month of widespread crypto-FUD and a series of poorly timed disasters. The first hit to Bitcoin came with the false announcement that South Korea would be banning cryptocurrency (which instead turned into a more predictable story of market manipulation and insider trading). Coinmarketcap decided to publish its data, unannounced to would-be traders, without including the higher priced Korean exchanges, which created a widespread price depression (in numbers alone, not actual value) that translated into a market panic and selloff.
While the market conditions have been unfortunate and media press is slanting negative, cryptocurrency is caught in a whirlwind of factors negatively impacting the price beyond the intrinsic value of the currency. If you believe in Bitcoin, Litecoin, Ripple, etc., you know their worth extends beyond a month long dip in price–even if that dip continues for the foreseeable future.
So what’s really causing the downturn in excitement, profit and expectation for crypto?
Lack of real-world implementation.
Bitcoin is the figurehead for the cryptocurrency industry. New investors to crypto almost unanimously start with purchasing Bitcoin first and then venturing into the more alluring, but speculative altcoins. Because of this–in combination with household name recognition and financial press coverage–most of the money flowing in and out of crypto must first pass through Bitcoin. Therefore, the entire market hinges on the price of Bitcoin. Even if we ignore that most exchanges operate off BTC pairings for liquidity, Bitcoin is the litmus test for the health of the industry.
That needs to change.
It’s not that Bitcoin should disappear into the ether (that would be disastrous for the industry as a whole), but the market must shift to supporting, with dollars and enthusiasm, the projects that are able to show the greatest potential and offer the most real-world utility.
Litecoin fits that description nicely, and offers advantages over the rest of the marketplace:
Feasibility as a currency. For all the reasons to be bullish on Litecoin, the main reason is this: Litecoin is succeeding as a digital currency. Bitcoin pricing has stagnated not because of a lack of interest or excitement, but because of fear over usability. Ripple underwent the same stagnation through the second-half of 2017, as investors in XRP were fearful over the currency becoming irrelevant in transactions between banks and other financial services. There are numerous investors who purchased their first piece of Bitcoin in Q4 2017 (when media coverage was hitting an ATH), sat on it for a few weeks and then came to the conclusion that there was nothing to use it for.
Most of cryptocurrency suffers for the same reason. People are too fearful to spend their currencies and miss out on an appreciation of price, but they also have to contend with rising transaction costs and long delays in confirmation. Neither creates the conditions for a feasible currency. Litecoin suffers from the fear of spending too soon (and missing profit), but judging off of price and other factors, it is safe to say the market has recognized LTC as a digital currency. Bitcoin’s present price, hitting nearly 20000 USD at the last high, is a barrier to entry and psychologically unappealing as a currency. For most people, Bitcoin is an entrenched digital asset, much like gold, that should be held and allowed to appreciate over a long period of time. Litecoin benefits from a cheaper price-per-coin that makes it more attractive in exchanging as a currency. Sure, Litecoin can have the same percentage swings as Bitcoin and the rest of the market, but paying with LTC today does not mean missing out on a 1000% gain tomorrow. That’s not to say the price of Litecoin won’t be exponentially more valuable in the future. It just means that the higher max-supply and lower price-per-coin is a preference for those who want to actually spend their currency or exchange it for more than just government fiat.
Faster transactions, lower fees. There is a scaling debate that everyone wants to bring up, but for now Litecoin is a superior product to Bitcoin in its use as a currency. Litecoin is faster, cheaper and offers the same technological innovations as BTC in the form of segwit and lightning network capability. Now, with the availability of Litepay, Litecoin becomes an even more preferred option for merchants and other spheres of digital commerce. There are going to be growing pains, both for consumer and merchant, as cryptocurrency finds its way into the sphere of commerce.
But that transition has to happen.
If crypto continues to stagnate in its original use as a currency, the market will dwindle and the media will become more vicious in allegations of bubble and ponzi scheme. Litecoin offers a solution to many of the problems plaguing Bitcoin. Without creating a zero sum game, where Litecoin can only succeed if Bitcoin falters, now is the time for LTC to push to the forefront as a usable tender of the digital age. Low fees and transactions, while still offering the many advantages of a decentralized currency, are going to be the primary motivator for any commerce giant looking to accept crypto.
Room to grow. Litecoin has a max supply four times that of Bitcoin. While it’s unrealistic to imagine that Litecoin will be 1:1 in value with Bitcoin, the gap should be much closer than the present ratio of ~1:63. Think of it this way: Litecoin does everything that Bitcoin does, but better. Sure the history and image of Litecoin is not as compelling as that of Bitcoin, but Litecoin has a greater potential in price than Bitcoin, particularly if the community can start pushing the currency into the spotlight. As stated earlier, significant gains in LTC price will make investors more reluctant to spend the coin as a currency–but only in the adoption phase. Last year was the year of crypto awareness and becoming a legitimate player in the eyes of the world. This year will be about adoption. More people than ever will own a stake in crypto, which opens the door for currency to be traded freely and used in transactions to a greater degree than at present. It also means that the price will become more stable, as the currency reaches a higher point of saturation and there are more hands to mitigate short-term price movements. To put things in perspective, a single price-tracking website was able to tank the crypto marketplace nearly 20% across the board. That shows just how nascent the industry is, and how far it has left to go. With Litecoin trading at 150 USD (down from an all-time high of 380 USD) it seems more likely to end the year at 1000 USD, constituting a gain of 566%, versus a similar Bitcoin valuation of 63000 USD. It’s not that the latter is impossible to imagine, in particular if Bitcoin can solve the scaling debate, but Litecoin has much more room for an exponential increase in price.