Litecoin Will Do Well As Long as It Stays in the Top 10 Altcoin List
Litecoin (CCC:LTC-USD), at $294.70 on Monday, May 3, 2021, is up about 140% year-to-date, as it ended 2020 at $124.69. This is not all that exciting compared to other altcoins that have done much better. But LTC is likely to continue to do well this year.
Litecoin now has a market capitalization of almost $20 billion, using the Coinmarketcap.com list of crypto coins. This makes it the 10th largest cryptocurrency. As a result, Litecoin will likely keep rising, especially if it stays in the top 10 altcoin list.
Alternative Payment Network
Litecoin is a peer-to-peer cryptocurrency and has been around since 2011 as an early Bitcoin (CCC:BTC-USD) spinoff. It was created by a former Google and Coinbase engineer, Charlie Lee. Its network was created to allow instant, near-zero cost payments around the world.
The Litecoin community believes that its payments transfer system is its main draw. This is despite the fact that its algorithms seem to be harder to mine than Bitcoin and Ethereum (CCC:ETH-USD). Its popularity as a payment system is one of the reasons why Litecoin has stayed in the top 10 crypto-list for so long.
Litecoin has a reputation as a proven medium of exchange complementary to Bitcoin. This is what will continue to propel the LTC coin higher. Recently, some of its proponents have come out with reasons why its “haters” are wrong about Litecoin.
This is especially important since January 2021 is when the Office of the Comptroller of the Currency allowed banks to use “stablecoins” as payment methods. So far Bitcoin and Litecoin are not considered stablecoins, although there have been offshoots of them linking them to the US dollar.
Four Reasons Why Litecoin Is Better Than Bitcoin
Inverse.com reports that there are four major reasons why Litecoin is better than Bitcoin as a cryptocurrency. First, it has lower transaction fees than Bitcoin. Miners have to pay less, about 5.8 cents on average to get their transactions put into a blockchain and then receive Litecoin mining rewards. Bitcoin’s transaction fees on average are higher at $22.40, according to bitinfocharts.com. This has led to congestion at Bitcoin’s blockchain validation system.
Second, Litecoin uses Scrypt as its algorithm encryption method vs. the Bitcoin SHA-256 algorithm. As inverse.com explains, Litecoin’s method is less susceptible to manipulation by ASICs (application-specific integrated circuits), allowing smaller miners to earn validation rewards.
By contrast, Bitcoin is becoming more susceptible to ASIC mining, which will lead to potential control of the Bitcoin supply by a few large mining companies. LTC mining is much more diversified because ASIC miners don’t control it.
Third, Charlie Lee, Litecoin’s founder calls LTC, the “digital silver” vs. Bitcoin as “digital gold.” Silver is normally spent on smaller ticket items than gold, so it is more universal.
Lastly, Litecoin has a higher supply cap. It can have a total of 84 million Litecoin mined, vs. Bitcoin’s 21 million. Moreover, its availability (circulating supply) is $66.75 million or 79.4%. By contrast, Bitcoin has a more restricted circulating supply of 18.689 million of 21 million total or 89%. That has led to hoarding of Bitcoin compared to Litecoin.
Where This Leaves Litecoin
Litecoin has gained general acceptance in the crypto community. It often trades on new exchanges and related wallets along with Bitcoin and Ethereum.
For example, recently PayPal decided to allow crypto payments within its Venmo network. LTC was included as one of the four cryptos tradeable in Venmo, including Bitcoin, Ethereum and Bitcoin Cash (CCC:BCH-USD).
As a result, as long as Litecoin stays visible as a top 10 crypto coin, it should continue to rise in price. It might now do as well as some of its smaller altcoin neighbors, but it will still do well over time.
On the date of publication, Mark R. Hake held a long position in Bitcoin and Ethereum.
The post Litecoin Will Do Well As Long as It Stays in the Top 10 Altcoin List appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.