Following a particularly exciting bull run, Litecoin has seen price increases of 22% in just one week. As we watch with eager eyes what may come of this, let’s take a look at this year and see how Litecoin performed in 2020, as well as what the future might hold.
One of the more successful hard forks of Bitcoin, Litecoin is a payment focused monetary system that offers both high speeds and low costs. The Litecoin blockchain was established in 2011 by a former Google engineer, Charlie Lee. The cryptocurrency was designed to compliment Bitcoin, and has become affectionately known as Digital Silver (to Bitcoin’s Digital Gold). Since implementing a hard fork of the Bitcoin blockchain, Litecoin tweaked it to incorporate larger block sizes and a different hashing algorithm.
The Litecoin network is able to facilitate faster transactions, 4x that of Bitcoin, as well as low transaction fees. Instead of paying a percentage of your transaction, on the Litecoin network transaction fees are fixed to 1/1,000 LTC no matter the size of your transaction. There is also a much larger supply of LTC when compared to Bitcoin, with a maximum supply of 84,000,000 LTC. The cryptocurrency holds a prominent position in the top 10 cryptocurrencies based on market cap.
When looking at how Litecoin performed in 2020 the answer is a unanimous “very well”. The top 10 cryptocurrency is currently up 80% this year alone, a small step behind its predecessor which has seen gains of over 120%.
The cryptocurrency started off this year trading at $42, a low considering just 7 months prior it has been trading at $141. By mid February, LTC had almost doubled in price, trading at a balmy $83, before experiencing a mild decline to $50 in March.
It should come as no surprise to anyone that the infamous stock market and crypto dip of March 2020 also had an effect on Litecoin, with the cryptocurrency falling to a low of $28. From this 2020 low, Litecoin picked itself back up and started a gradual climb to where it currently sits (at the time of writing) at $90.
There’s no denying that Bitcoin is the strongest surge in the market, oftentimes carrying various altcoins with it through its ups and downs. This year was a big year for the original cryptocurrency, with many altcoins joining in on the ride. Following much institutional interest in Bitcoin, potentially influenced by the mass market crash, weakening fiats, and governments printing money, Bitcoin also saw some heightened corporate interest. Several large corporations this year announced that they would be moving their reserves to Bitcoin, with a number of big payment giants, like Square and PayPal, also announcing their support for crypto.
While Litecoin wasn’t listed as one of the soon to be supported cryptocurrencies, it certainly felt the effects with consumer interest peaking.
According to the CEO of crypto exchange WazirX, Nischal Shetty, what we are witnessing now in the markets draws parallels to the markets following previous halvings. Shetty went on to explain that the previous halving-inspired bull run was largely due to frenzy and individual traders, while this bull run is substantially influenced by corporations and institutional investors.
To illustrate his point he turned to Google Trends, which captures the volume of search enquiries on the website. Searches for “Bitcoin price” currently sits at a measure of 13, minimal when compared to the 93 rating at the time of the all time high in 2017.
Market insiders are anticipating that the original cryptocurrency will surpass its previous all time high of $20,000. Let’s look to Mayer Multiple, a formula that looks at the BTC price, its 200-day moving average and determines where in the bull or bear run it is currently sitting. According to the current stats, Bitcoin is currently sitting at a level of 1.67, a substantial amount lower than the 2.4 threshold that signals the end of a bull run. As we know, altcoins tend to ride on the wave of the Bitcoin market, so it is historically safe to assume that Litecoin will follow similar runs.
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