Litecoin (LTC)–While most of the market has benefited from this week’s upswing in prices, Litecoin has posted a 30% increase in valuation over the last seven days. Trading at 114 USD, LTC has climbed above 147 USD as of writing, and looks to continue a steady increase in valuation to eat into the losses of the past several months. While the coin is still trading well below even 50% of December’s all time high of 380 USD, the currency is showing a healthy trend and increased valuation that matches the growing news of LTC adoption. More importantly, Litecoin has shown price growth even in the face of Bitcoin stagnation, which gives evidence that the currency may be decoupling from its historic Bitcoin relationship. The entire market of cryptocurrency benefits from a rising Bitcoin price, through the valuation of BTC and also the signaling effect it sends to mainstream investors. However, Litecoin stands to benefit from an individual valuation, in part because of its competitive nature to the original cryptocurrency. Litecoin has long been held up as the “silver” to Bitcoin’s “gold” but that analogy is now starting to shift to recognize and favor the advantages of LTC over Bitcoin.
Here are a few reasons why Litecoin should be exciting crypto bulls as we enter the second quarter of the year:
LitePay may have been one of the highest profile cryptocurrency failures to date, in that the project shuttered just weeks after the original release date. However, the failed Litecoin project represents a number of healthy attributes for Litecoin and the Litecoin community.
- A commitment to risk taking. The LitePay project was a lofty goal from the get-go, with a high chance of failure. The design was to give both merchant and buyers ubiquitous access to Litecoin-based transactions. LTC holders could spend their currency through a debit card accepted anywhere in the world. Merchants could choose to engage with Litecoin customers, while limiting their exposure to the volatility of cryptocurrency. In the end, the logistics and security of the project presented too much of a challenge for even the Litecoin Foundation to contend with, and the project was shut down for good. But it shows the tenacity of Litecoin developers in going after a big project, even if it held the possibility of failure–a hallmark of all winning companies.
- A commitment to LTC transactions. Even with the LitePay project shelved, Litecoin has announced forthcoming debit card paternerships with TenX and WireX to fill the void left behind. Clearly, Charlie Lee and the Litecoin Foundation are not giving up on providing Litecoin holders the easiest and most streamlined method for spending their LTC. Some in the industry have found fault with the pursuit of crypto-backed debit cards as a band-aid in the replacement of fiat, but there is no other way to gain greater traction than giving merchants and consumers the ability to engage and disengage with cryptocurrency at will. Just because Walmart won’t accept cryptocurrency (yet), doesn’t mean that Litecoin holders should avoid finding an option for spending their LTC at the store. The argument against crypto backed debit cards is one that sees an artificial constraint on the industry as opposed to a natural progression of adoption. Yes, the currencies are fully capable of transacting as-is (meaning anyone can send and receive Litecoin with nothing more than a wallet, address and internet connection). But debit cards allow for an expansion of use, one that might otherwise take decades to permeate into brick and mortar and mainstream commerce.
More than any other currency, the Litecoin community has seemed to embrace the idea of LTC as a means for value transfer. Price speculation and value analysis is inherent in any cryptocurrency subculture, but Litecoin has managed to keep the conversation around building a workable product that is fit for greater adoption, such as Amazon or another commerce giant to help reach market saturation.
A year ago, Litecoin was another niche cryptocurrency that had yet to gain traction outside of being listed on Coinbase. In that time, Litecoin has consistently held a position in the top 6 of cryptocurrencies by market capitalization, and has structured some of the more headline grabbing partnerships within the industry.
We have argued that Litecoin is in the rare position to benefit from the success of Bitcoin while also making gains through direct competition. Most of cryptocurrency is reliant upon a healthy BTC price (much as how most of the world’s fiat hinged upon the US Dollar), as a beacon to the general public and tangential investors that cryptocurrency is worth the price of admission. When Bitcoin prices elevate, the rest of the market tends to benefit from the influx of capital, at least in the long-run. Litecoin has a special relationship to Bitcoin, in that both currencies are linked through common perception. Most people familiar with Litecoin think of it as an attache to Bitcoin: faster, cheaper and a testing ground for innovation. It has become ubiquitous in the industry to convert Bitcoin and other bulky cryptocurrencies to LTC first before transferring to alternative exchanges or wallet addresses. Because of this process, Litecoin has intrinsic value to the industry as a medium of exchange, even if the individual investor chooses to make their holding in other cryptocurrencies.
When Bitcoin performs well, not only do expectations for Litecoin elevate (partly through the gold/silver analogy to Bitcoin), but the market comes to appreciate Litecoin as a potential competitor. Litecoin was the first to implement the innovation of segwit, and could very well beat Bitcoin in lightning network node saturation. In addition to being a currency with a development team committed to transaction utility, Litecoin has become the testing ground for advancement in cryptocurrency technology. Litecoin has a smaller market share, freeing it up for greater experimentation and change as opposed to the massive consensus required for implementing change to BTC. We have already seen the near fatal effects of the Bitcoin/Bitcoin Cash split-off, with both parties now claiming to be the original embodiment of Satoshi Nakamoto’s currency. Bitcoin will continue to be plagued by arguments of ideology and development practices, while Litecoin moves under the radar, giving it the advantage of development speed and risk-taking.
One of the core principles to cryptocurrency is the idea of decentralization: unlike traditional fiat, which answers to the manipulation of banks and government agencies, cryptocurrency has no authority figure or gatekeeper making decisions. Instead, the currencies respond to the needs of the community, allowing the market to direct best practices through continued investment and interest.
Despite this emphasis on avoiding centralization, investors have still gravitated to the allure of strong leadership figures. It could be a carry over effect from the traditional stock market, where investors are accustomed to the guiding presence of CEOs in steering their investment decisions. However, one thing remains clear: cryptocurrency may be decentralized, but figureheads for the currencies are appreciated, and even preferred, by the community.
Look at the top currencies. Bitcoin built much of its success through Satoshi Nakamoto’s presence in the early years, and still benefits from his former doctrine in the way many Americans look to the teachings of the Founding Fathers in guiding constitutional practices. Ethereum has had Vitalik Buterin to inject genius into the project at regular intervals. XRP has the backing of Ripple, the centralized parent company, to form mature banking partnerships and grab headlines with acts of investment and charity. Bitcoin Cash is steered through the heavy-handed antics of Roger Ver, who has been a mainstay in the crypto space despite his controversial claims.
— Charlie Lee [LTC] (@SatoshiLite) April 17, 2018
Finally, we have Litecoin under the leadership of Charlie Lee. Charlie, like Satoshi Nakamoto, has created an interesting space for his presence surrounding the currency in that he is financially divorced from the project. His incentive is not to drum up elevated expectations or create pump and dump news headlines, but to genuinely grow his creation to world-wide renown. As opposed to dealing with a founder that has potential millions to gain or lose, companies forming partnerships with Litecoin via Charlie Lee know they are working with a trustworthy individual that is driven by the success of cryptocurrency. Some may find fault with the Charlie’s lack of financial incentive, or how he sold his Litecoin during the currency’s last all time high, but his motivations remain clear: Charlie is willing to do what it takes to grow Litecoin development and adoption.
As a potential investor, nothing could be a more welcome sight.