Litecoin (LTC) surged from $100 to $400 from Friday to Tuesday Dec. 12 in terms of USD. In terms of Bitcoin it went from .005 BTC to over .02.
No matter how you look at it, Litecoin, after months on end of being stuck at $100 or less and losing value against Bitcoin made an epic come back. Against the dollar it was up about 400% at its high, against BTC it was up by a little over 300%. That is impressive.
It isn’t clear if this price can be sustained, and its unlikely that the growth can be sustained, but even a big pullback from this point represents great gains for long term holders and indicates a great future for Litecoin. Meanwhile, there could be more room to run in the short term (and very more likely room to go up in the long term).
Thus, the future looks good. With that in mind, to understand what this price increase means, we have to look at the “why.”
Although one can only speculate as to “why,” the following factors likely influenced Litecoin’s epic run:
- Bitcoin futures trading helped to legitimize cryptocurrency, those looking for the next big thing didn’t have to look far down the list to see Litecoin.
- Litecoin had been underperforming for months. It had been stuck in a price range and losing value against Bitcoin. Many had been predicting a breakout for a while. Litecoin was arguably undervalued, thus this rise could simply be a positive correction of sorts.
- Bitcoin futures trading has potentially reigned in Bitcoin’s volatility a little. That paired with the recent spike in Bitcoin potentially leaving investors focused on one of the next coins in line Litecoin.
- Litecoin has faster transaction speeds and lower fees than other coins. With the new volume crypto is seeing, major coins like Bitcoin and Ethereum have been having speed issues and have been resulting in higher transaction fees. Of all the coins traded on Coinbase/GDAX, Litecoin is the only one not suffering from this issue. Here one should note that Coinbase/GDAX is one of the most popular exchanges in the U.S., thus they are one of the drivers of the crypto economy.
- Litecoin had been overdue for a run (if you believe that runs can be “overdue”). Once it started running excitement kicked in and drove the price up.
- Litecoin is the most affordable of the coins on GDAX in terms of USD. Those looking to get into crypto cheap may have been attracted to the price point.
- Litecoin had been stuck at $100 or less for so long that there wasn’t a lot of people waiting to sell at higher prices, thus the coin’s price (market cap considered) was easier to move than other coins.
Any or all of those factors could have been an influence on Litecoin. Further, we could have missed some key factors (or even the key factor).
Now one might question “will Litecoin take Bitcoin’s place as the top coin.” The answer to that is very likely “no.”
The crypto economy is comprised of different coins with different uses. They work together more than they vey for positions.
On a given day it could look like BTC is king/queen, that Bitcoin Cash will dominate, that IOTA will move to the top, that Litecoin will, or that Ethereum will, etc. However, history has shown us that the most likely outcome is that they all ebb and flow but do well over time, with a given coin capturing the spotlight at a given point in history.
Litecoin is excellent for transactions, but its excellence to some degree rests on a stable price. Thus, if there is one con here, it is that coins that move so fast make for odd currency. No one wants to buy a good or service for $10 today when the value of the currency could be $40 next week. In other words, Litecoin is a great investment, and a good way to send value around the digital space (low fees, fast transactions), but it otherwise is just as odd a choice for a currency as Bitcoin is.