Prime cryptocurrencies have been tearing it up prior to now 12 months, and Litecoin (CCC:LTC-USD) is not any exception. The worth of Litecoin has practically tripled prior to now 12 months. Nevertheless, with so many cryptos to select from, it may be tough for traders to know the place to begin.
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 precious cryptos. That dimension means Litecoin has comparatively excessive visibility and excessive liquidity. Its common each day buying and selling quantity is over 2 million cash.
Liquidity is extraordinarily essential within the crypto market given the acute volatility within the area. With out sufficient liquidity, a single vendor might doubtlessly crash the worth of a cryptocurrency. Thankfully, LTC traders won’t ever have to fret about getting out of their positions.
Reliability: With regards to the reliability of the underlying software program, Litecoin traders can relaxation simple realizing Litecoin is likely one of the oldest cryptos and was basically created as a fork within the Bitcoin (CCC:BTC-USD) blockchain. Like Bitcoin, LTC is open-sourced and decentralized.
Its developer was laptop 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 purpose 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 velocity suggests Litecoin could show simpler to scale over time.
Uphill model battle: On the planet of crypto, Bitcoin is boss. Whereas Litecoin could have been constructed to be a substitute for Bitcoin, most traders see Ethereum (CCC:BTC-USD) as the first various to Bitcoin. Whether or not or not it’s truthful, the truth that Litecoin was a fork of Bitcoin hurts its popularity as a real various. As of now, many traders lump Litecoin in with the opposite eight cryptos which can be among the many prime 10 in worth apart from Bitcoin or Ethereum.
Shedding market share: One other discouraging issue for Litecoin traders is that the crypto has been dropping market share, not gaining it. Over the past big cryptocurrency run again in 2017, Litecoin ended the 12 months because the fifth largest crypto by market cap. In the present day, it’s No. 10.
Prior to now three years, the worth of Litecoin is up 44.9%. In that very same time, the worth of Bitcoin is up 365.4%. Ethereum is up 348.6%.
Litecoin’s creator dumped his cash: Some of the devastating headlines for Litecoin traders lately 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 prime.
Lee stated he offered his stake so he couldn’t be accused of manipulating the Litecoin market. He stated 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 have 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 believe all cryptocurrencies will face pressures from world regulators in years forward. They’re nonetheless comparatively tough to make use of to make on a regular basis purchases. And they’re means, means too unstable for anybody to make use of as an affordable retailer of worth.
That being stated, I’m significantly bearish on cryptos apart 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 tough sufficient for Bitcoin and Ethereum to achieve mainstream traction in years forward. I don’t know if cryptocurrencies are the way forward for forex or just the newest Wall Road fad. Both means, I’ve a tough time seeing a motive 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 workers 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.