Litecoin (CCC:LTC-USD) is among the authentic large cryptocurrencies, based by Charlie Lee approach again in 2011 as a peer-to-peer (P2P) coin. This makes it one of many first actual opponents to Bitcoin (CCC:BTC-USD). Certainly, Lee created Litecoin utilizing most of the similar concepts as BTC, however designed it to be extra environment friendly and helpful in on a regular basis transactions. Bitcoin, as buyers have realized, can conversely be fairly clunky for small purchases.
Litecoin was a fast success. Its worth surged from $3 to over $35 in 2013. Then it died down, retreating again to the $3 to $5 vary for a number of years. Nevertheless, it wakened once more in 2016. By the next yr, it had soared to the jaw-dropping $350 stage.
In fact, even after that, it wasn’t clean crusing. With the following crypto crash, Litecoin fell again to $40, then rocketed as soon as once more to costs over $400, briefly topping its 2017 excessive. Right this moment, the current correction hasn’t spared LTC, although. It’s now again to only below $200.
So, right here’s what you need to do with Litecoin as we transfer additional into 2021.
Litecoin: Effectivity Might Pay Dividends
Litecoin has a number of key variations from Bitcoin. In any case, Lee created Litecoin with the particular intention of enhancing on BTC’s framework.
For one, Litecoin has a sooner block time, producing rewards for miners each 2.5 minutes versus 10 minutes. This enables for sooner transaction occasions and far greater capability on its community for funds and transactions.
Moreover, LTC’s mining set-up differs. By utilizing a unique algorithm, Litecoin favors mining by way of graphics playing cards slightly than Bitcoin’s processor-intensive format. Regardless, as the worth has soared, it has additionally turn out to be tough to mine Litecoin on peculiar computer systems. That has diminished the advantages to a point. Nonetheless, LTC’s backers could make some credible claims of getting a extra environment friendly platform than BTC.
This potential benefit got here into focus earlier this month, when Elon Musk lashed out on the excessive vitality depth of Bitcoin. Tesla (NASDAQ:TSLA) abruptly stopped accepting Bitcoin for automobile funds whereas Musk warned of Bitcoin’s extreme utilization of electrical energy, notably from the coal trade. This has created a possible opening for Litecoin and different efficiency-focused alternate options to take share from Bitcoin.
The place’s the Market Adoption?
As you possibly can inform, Litecoin has a lot going for it. It’s a decade previous now and has been listed on main cryptocurrency exchanges like Coinbase (NASDAQ:COIN) for ages. It’s founder, Charlie Lee, can also be a widely known determine within the crypto world. Plus, its worth even soared within the first large cryptocurrency bull run, again in 2017.
However this additionally implies that Litecoin has had loads of possibilities to make a footprint. And but, it hasn’t gotten that a lot widespread acceptance. In truth, the coin boasts comparatively few big-name retailers or different partnerships, regardless of being a crypto ostensibly designed round ease-of-use for funds.
General, Litecoin is all the way down to number 15 overall within the crypto market-capitalization rankings. That’s not unhealthy, by any means, however LTC spent years within the high 5. Now, it’s being surpassed by an rising variety of initiatives with extra dynamic outlooks.
True, Litecoin nonetheless has of us buying and selling it primarily based on its model identify. However cryptos evolve over time. It’s removed from sure that LTC will proceed to face out on this shifting ecosystem.
Proper now, Litecoin is previous information within the cryptocurrency neighborhood. On the one hand, that’s something of an advantage. Folks have heard of it and plenty of exchanges record it. There’s some remaining first-mover benefit there.
However, although, LTC doesn’t have the identical enchantment as newer, extra promising initiatives. In some unspecified time in the future, this identify wants to achieve adoption or it would fade.
LTC barely made a brand new all-time excessive this yr earlier than crashing. That’s a woeful efficiency, in comparison with different legacy cash like Bitcoin, Ethereum (CCC:ETH-USD) and “jokecoin” Dogecoin (CCC:DOGE-USD). All three of those names exceeded their earlier peaks to dramatic levels.
Arguably, a number of the fault lies with Lee himself. He infamously offered or donated all of his Litecoin again in 2017, when the crypto had its first large run-up. The value of LTC collapsed shortly after Lee’s gross sales. With the founder cashing out and the forex failing to maintain up with new rivals, it’s no marvel that Litecoin has underperformed lately.
On the date of publication, Ian Bezek didn’t have (both straight or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written greater than 1,000 articles for InvestorPlace.com and Looking for Alpha. He additionally labored as a Junior Analyst for Kerrisdale Capital, a $300 million New York Metropolis-based hedge fund. You’ll be able to attain him on Twitter at @irbezek.