Prime cryptocurrencies have been tearing it up up to now yr, and Litecoin (CCC:LTC-USD) is not any exception. The worth of Litecoin has practically tripled up to now 12 months. Nevertheless, with so many cryptos to select from, it may be troublesome for traders to know the place to start out.
Right here’s a take a look at the professionals and cons of shopping for LTC.
Liquidity: With a market cap of $11.6 billion, Litecoin is at present one of many 10 most beneficial cryptos. That measurement means Litecoin has comparatively excessive visibility and excessive liquidity. Its common day by day buying and selling quantity is over 2 million cash.
Liquidity is extraordinarily vital within the crypto market given the acute volatility within the area. With out sufficient liquidity, a single vendor might probably crash the value of a cryptocurrency. Luckily, LTC traders won’t ever have to fret about getting out of their positions.
Reliability: In relation to the reliability of the underlying software program, Litecoin traders can relaxation straightforward realizing Litecoin is likely one of the oldest cryptos and was primarily created as a fork within the Bitcoin (CCC:BTC-USD) blockchain. Like Bitcoin, LTC is open-sourced and decentralized.
Its developer was pc scientist named Charlie Lee. Lee beforehand labored for Alphabet’s Google (NASDAQ:GOOG, NASDAQ:GOOGL) and now works for Coinbase (NASDAQ:COIN). He’s actually no slouch. Lee’s preliminary objective was to make Litecoin be to Bitcoin what silver is to gold.
Efficiency: Lee needed to enhance upon Bitcoin, so Litecoin has a number of superior features. Bitcoin transactions take, on common, slightly below 9 minutes to confirm. LTC transactions take solely about 2.5 minutes to confirm. That superior pace suggests Litecoin might show simpler to scale over time.
Uphill model battle: On the earth of crypto, Bitcoin is boss. Whereas Litecoin might have been constructed to be an alternative choice to Bitcoin, most traders see Ethereum (CCC:BTC-USD) as the first various to Bitcoin. Whether or not or not it’s honest, the truth that Litecoin was a fork of Bitcoin hurts its repute as a real various. As of now, many traders lump Litecoin in with the opposite eight cryptos which might be among the many high 10 in worth aside from Bitcoin or Ethereum.
Dropping market share: One other discouraging issue for Litecoin traders is that the crypto has been shedding market share, not gaining it. Over the past large cryptocurrency run again in 2017, Litecoin ended the yr because the fifth largest crypto by market cap. Right this moment, it’s No. 10.
Prior to now three years, the value of Litecoin is up 44.9%. In that very same time, the value of Bitcoin is up 365.4%. Ethereum is up 348.6%.
Litecoin’s creator dumped his cash: One of the crucial devastating headlines for Litecoin traders in recent times got here in 2017 when Lee announced he had offered all of his Litecoin. Lee timed the sale practically completely, asserting it in December 2017 inside weeks of the market high.
Lee mentioned he offered his stake so he couldn’t be accused of manipulating the Litecoin market. He mentioned it was a battle of curiosity for him to tweet about Litecoin when he owned such a big stake in it and was such an influential voice. Even when his causes for promoting had been admirable, it doesn’t instill confidence within the crypto when the founder dumps all of his holdings.
How To Play It
I’m typically not bullish on cryptocurrencies as a gaggle. I feel all cryptocurrencies will face pressures from international regulators in years forward. They’re nonetheless comparatively troublesome to make use of to make on a regular basis purchases. And they’re method, method too risky for anybody to make use of as an inexpensive retailer of worth.
That being mentioned, I’m notably bearish on cryptos aside from Bitcoin and Ethereum. Bitcoin has the true first-mover benefit and model worth. Ethereum has far superior technology and is the preferred various to Bitcoin.
It’s going to be troublesome sufficient for Bitcoin and Ethereum to realize mainstream traction in years forward. I don’t know if cryptocurrencies are the way forward for foreign money or just the most recent Wall Road fad. Both method, I’ve a tough time seeing a purpose for Litecoin to outperform Bitcoin or Ethereum within the long-term.
On the date of publication, Wayne Duggan 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.
Wayne Duggan has been a U.S. Information & World Report Investing contributor since 2016 and is a employees author at Benzinga, the place he has written greater than 7,000 articles. Mr. Duggan is the writer of the ebook “Beating Wall Street With Common Sense,” which focuses on investing psychology and sensible methods to outperform the inventory market.