Litecoin (CCC:LTC-USD) is without doubt one of the authentic huge cryptocurrencies, based by Charlie Lee method again in 2011 as a peer-to-peer (P2P) coin. This makes it one of many first actual rivals to Bitcoin (CCC:BTC-USD). Certainly, Lee created Litecoin utilizing most of the identical concepts as BTC, however designed it to be extra environment friendly and helpful in on a regular basis transactions. Bitcoin, as traders have realized, can conversely be fairly clunky for small purchases.
Litecoin was a fast success. Its value 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. Nonetheless, it awakened once more in 2016. By the next 12 months, it had soared to the jaw-dropping $350 degree.
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. At this time, the current correction hasn’t spared LTC, although. It’s now again to simply beneath $200.
So, right here’s what it’s best 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 precise intention of bettering on BTC’s framework.
For one, Litecoin has a quicker block time, producing rewards for miners each 2.5 minutes versus 10 minutes. This enables for quicker transaction instances and far larger capability on its community for funds and transactions.
Moreover, LTC’s mining set-up differs. Through the use of a distinct algorithm, Litecoin favors mining through graphics playing cards reasonably than Bitcoin’s processor-intensive structure. Regardless, as the worth has soared, it has additionally develop into tough to mine Litecoin on abnormal computer systems. That has decreased the advantages to some extent. 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 power 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 business. 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 outdated now and has been listed on main cryptocurrency exchanges like Coinbase (NASDAQ:COIN) for ages. It’s founder, Charlie Lee, can also be a well known determine within the crypto world. Plus, its value even soared within the first huge cryptocurrency bull run, again in 2017.
However this additionally signifies that Litecoin has had loads of probabilities 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 right 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 people 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 outdated information within the cryptocurrency neighborhood. On the one hand, that’s something of an advantage. Folks have heard of it and plenty of exchanges listing it. There’s some remaining first-mover benefit there.
However, although, LTC doesn’t have the identical enchantment as newer, extra promising initiatives. Sooner or later, this identify wants to realize adoption or it’s going to fade.
LTC barely made a brand new all-time excessive this 12 months 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 bought or donated all of his Litecoin again in 2017, when the crypto had its first huge 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 surprise that Litecoin has underperformed in recent times.
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 In search of 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.