Bitcoin is literally the elephant in the room in cryptocurrency circles. With over half of the total market capitalization, it is understandable that Bitcoin gets that much attention. Ethereum has not done too badly either, particularly with the rise of decentralized finance (DeFi) platforms.
Looking at the big picture, the cryptocurrency market is more diverse than beginners would imagine. From the expected purchase and holding of assets to more sophisticated forms like options trading, there are endless opportunities to explore. This market is as lucrative as they come.
Litecoin is a fascinating project. As an understudy to Bitcoin, it just about manages to fly under the radar. The proposition of Litecoin trading on trading platforms like Prime XBT is feasible. It is one of those underappreciated assets that have a potentially great upside.
What Is Litecoin All About?
Starting out as a pioneer is great. It gives a product better name recognition and the market gets to associate the industry with that asset or product. Bitcoin certainly has that incumbency advantage.
The next best thing for subsequent versions is to be improvements on the first. Litecoin is a better version of Bitcoin in the sense of faster transaction speeds, by processing a block an average of 2.5 minutes compared to 10 for Bitcoin. In summary, Litecoin has these advantages:
- The Litecoin blockchain can handle more transactions. This is because it has a faster block generation time than Bitcoin.
- Litecoin has remarkably low transaction fees in comparison to Bitcoin and other options like PayPal.
Charlie Lee, who previously worked at Alphabet Inc., founded this coin in 2011 to create a cryptocurrency with better liquidity and faster transaction speeds than Bitcoin. Having a founder with a reputable profile worked out just fine for Litecoin. Investors looking for the ‘next Bitcoin’ will certainly find a home in Litecoin.
Litecoin has done pretty well so far. In 2017, at the height of the cryptocurrency Bull Run, it briefly went over the $30,000 mark. This was an all-round great milestone for a project that started from scratch.
Litecoin (LTC) Prices In 2020
Litecoin has had a tumultuous 2020, like a lot of other assets in the market. It started the year in the $40 range before appreciating gradually towards the $70 mark.
What followed was a sharp decline in March. This period was rough for Bitcoin and equity markets as well because of the Covid-19 induced economic crisis.
Litecoin went back below $40 before starting to ascend again in April. Its prices have had mini-rallies and corrections in the months between and sit at $73.42 at the time of writing.
This is impressive because unlike equity markets, cryptocurrencies don’t have the luxury of a government stimulus to shore things up when the going gets rough. This is pure resilience based on the belief of investors in this asset.
The recent rally over $70 reflects a general trend in cryptocurrencies. Bitcoin has had a remarkable rally over the past two weeks breaking past the $16,000 mark. This rally is almost reminiscent of the 2017 market rally. It is difficult to pinpoint the precise cause for this rally.
It could be the greater institutional involvement in cryptocurrencies causing the upswing. An alternative explanation is that there is a supply crunch for coins like Litecoin and Bitcoin. Right now, many investors are sitting on their crypto rather than dumping it on the markets.
The surge of Coronavirus infections may also play a hand in the cryptocurrency boom. However, this is an unlikely cause because even cryptocurrencies collapsed in the March markets crash.
The Next Direction for Litecoin
As always, it is difficult to pinpoint the precise manner that Litecoin prices will trend. Prime XBT published a report by the Crypto Research Report Group that predicted $83 in 2020, $1,200 in 2025, and $2,250 in 2030. Should current trends hold, the $80 mark looks very achievable, the long term predictions are more uncertain.
Litecoin can work as a long term investment. Investing for short term gain can prove frustrating because Litecoin has yet to get back to its all-time highs. For skilled traders, day trading is also manageable.
To Wrap It Up
Cryptocurrency is one of those industries that is truly difficult to predict. It can go through periods of considerable dormancy and gradual appreciation before exploding. Such is the dynamism of cryptocurrencies.
As the world navigates the rigors of fiat money mismanagement, Litecoin may be one of the sleeping giants that will make the most of any future crisis. Its total supply of 84 million makes it a relatively scarce asset class.
It has better fundamentals than Bitcoin and might just catch the tailwind from its big brother’s appreciation.