Litecoin (CCC:LTC-USD) is likely one of the unique massive cryptocurrencies, based by Charlie Lee manner 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 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 awoke once more in 2016. By the next 12 months, 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 simply beneath $200.
So, right here’s what you must do with Litecoin as we transfer additional into 2021.
Litecoin: Effectivity May Pay Dividends
Litecoin has a number of key variations from Bitcoin. In spite of everything, 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 instances and far larger capability on its community for funds and transactions.
Moreover, LTC’s mining set-up differs. By utilizing a distinct algorithm, Litecoin favors mining through graphics playing cards slightly than Bitcoin’s processor-intensive format. Regardless, as the worth has soared, it has additionally turn into troublesome to mine Litecoin on unusual computer systems. That has diminished 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 options to take share from Bitcoin.
The place’s the Market Adoption?
As you’ll be able to 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 massive cryptocurrency bull run, again in 2017.
However this additionally signifies that Litecoin has had loads of possibilities to make a footprint. And but, it hasn’t gotten that a lot widespread acceptance. Actually, the coin boasts comparatively few big-name retailers or different partnerships, regardless of being a crypto ostensibly designed round ease-of-use for funds.
Total, Litecoin is all the way down to number 15 overall within the crypto market-capitalization rankings. That’s not dangerous, 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 based mostly on its model title. 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. Individuals have heard of it and plenty of exchanges checklist it. There’s some remaining first-mover benefit there.
Alternatively, although, LTC doesn’t have the identical attraction as newer, extra promising initiatives. In some unspecified time in the future, this title wants to realize adoption or it’ll 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 massive run-up. The value of LTC collapsed shortly after Lee’s gross sales. With the founder cashing out and the foreign money 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 may attain him on Twitter at @irbezek.