What factors affect the price of Litecoin and what does the future hold for this popular cryptocurrency?
Founded in 2011 by former Google engineer Charlie Lee, Litecoin (LTC) was created with the aim of improving bitcoin. Designed to offer faster processing times and lower fees than bitcoin, Litecoin is now one of the world’s 10 largest cryptocurrencies in terms of market cap.
As a well-established coin backed by a strong development team, Litecoin has attracted the attention of many traders seeking further growth. However, this digital currency will also face a few key challenges moving forward, so let’s take a look at what the future might hold for Litecoin’s price.
|Launch date||7 October 2011|
Litecoin price prediction
Before we go any further, it’s important to stress that cryptocurrencies are highly volatile and complicated, so purchasing any digital currency is a highly speculative move. There are several factors that could potentially contribute to a growth or decline in value of a particular cryptocurrency, so you need to research all of those factors before deciding to buy.
A selection of crucial points to consider before buying Litecoin are outlined below.
What could drive Litecoin’s growth?
- Advantages over bitcoin. The whole motivation behind Litecoin was to improve on bitcoin by creating a faster, more lightweight currency. These improvements are designed to make LTC more practical for use in small, everyday transactions.
- Supply. Supply and demand can play a crucial role in the value of any cryptocurrency. At the time of writing (28/02/18), data from CoinMarketCap revealed that more than 55 million of the total LTC supply of 84 million are already in circulation.
- Backed by a development team. Litecoin is backed by the Litecoin Core development team and the Litecoin Foundation, a non-profit organisation with a mission “to advance Litecoin for the good of society by developing and promoting state-of-the-art blockchain technologies”.
- Charlie Lee. Litecoin founder has built a notable presence on social media and also made appearances on mainstream media platforms like CNBC. While many cryptocurrencies are shrouded in secrecy and mystery, Lee’s media profile could help further establish the legitimacy of Litecoin.
- Ease of access. Litecoin is listed on a wide range of cryptocurrency exchanges around the world, featured not only in crypto-to-crypto pairings but also available for direct exchange with a number of fiat currencies. This widespread acceptance across exchanges improves public perception of the coin’s credibility, and also makes it easy to access for traders all over the globe.
- Coinbase support. Coinbase is a popular cryptocurrency exchange with more than 10 million customers around the world. It allows users to exchange fiat currency for just four cryptocurrencies – bitcoin, Bitcoin Cash, Ethereum and Litecoin.
- Forks. In February 2018, a hard fork of Litecoin resulted in the creation of Litecoin Cash. The fork was one of the factors that contributed to the price of Litecoin rising 30% in 24 hours, so any future forks could also have an impact on the coin’s price.
What could hold Litecoin back?
- Competition. There are many other peer-to-peer cryptocurrencies battling with Litecoin for market share. Bitcoin, in particular, is the most dominant player on global cryptocurrency markets, but other peer-to-peer cryptocurrencies like Zcash (ZEC), Dash (DASH) and Ripple (XRP) could also pose a threat.
- Lack of widespread adoption. One drawback that could hold Litecoin back is a lack of widespread, mainstream adoption. A key factor in encouraging widespread use of Litecoin may be the LitePay platform, but its postponed launch in February 2018 (more details further down the page) could hamper Litecoin’s progress.
- Increased regulation. As legislators around the world scramble to catch up with the growth of digital currencies, there’s always the threat of new laws or tightening of regulations surrounding crypto assets. For example, media reports of rumoured “crypto crackdowns” by governments around the world, notably China, can have a substantial impact on cryptocurrency prices.
- Volatility. On 12 December 2017, Litecoin founder Charlie Lee took to Twitter with a prediction of what lies in store for the Litecoin price. He wrote: “Ok, sorry to spoil the party, but I need to reign in the excitement a bit… Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy!”
- Negative impact of forks. Lee was also critical of the creation of Litecoin Cash, labelling the new cryptocurrency a scam. In a February 2018 interview, Lee told CoinDesk: “In my mind, it’s just a scam and it hurts Litecoin.”
Where to buy Litecoin
What’s next on Litecoin’s roadmap
At the time of writing, Litecoin had not yet released the 2018 version of its roadmap outlining the upgrades and developments planned for the next 12 months. Keep an eye on the Litecoin Core website for details of what the development team will be working on in coming months.
However, one important piece of technology that could have a substantial impact on the price of LTC is LitePay. This Litecoin payment system is designed to offer an easy way to accept Litecoin payments, store and spend Litecoin securely, or turn LTC into dollars with the LitePay debit card. While not an official Litecoin project, Lee confirmed on Twitter in January 2018 that the Litecoin team works “closely” with LitePay.
The system was scheduled to launch on 26 February 2018, but was postponed indefinitely at the last minute “due to recent hostile actions by card issuers towards crypto companies”. In other words, it was postponed in response to several major banks prohibiting their customers from buying cryptocurrencies using their credit cards.
This resulted in a price dip for Litecoin and means that a new launch date will need to be announced in the future. If successful, LitePay could potentially drive further adoption of Litecoin as a viable alternative to fiat currency, so this is one development to keep a close eye on.
- Bitcoin (BTC). The biggest cryptocurrency of them all needs no introduction, but it is one of Litecoin’s key rivals. It’s also worth pointing out that, as the first mainstream cryptocurrency and the largest player in the crypto world, bitcoin’s own price fluctuations can also have a significant impact on the prices of other digital currencies, including Litecoin.
- Litecoin Cash (LCC). Created in February 2018 as a hard fork of Litecoin, LCC is designed to provide improved transaction processing and to enable older mining hardware to be put to use. However, some critics of the project have labelled it a scam.
- Ethereum (ETH). The smart contracts platform is the second biggest cryptocurrency in terms of market cap and has a wide range of use cases. The wide availability of ETH on a host of exchanges also makes it a direct competitor to LTC among new buyers looking to break into the crypto market.
- Zcash (ZEC). A cryptocurrency based on privacy and user protection, Zcash uses zero-knowledge cryptography to provide anonymous transactions.
- Dash (DASH). Another crypto with a focus on privacy, Dash is designed to offer fast, secure and anonymous transactions. It’s also one of the top 20 cryptocurrencies by market cap at the time of writing.
- Ripple (XRP). Designed to provide a fast and affordable real-time payments network, XRP is currently one of the top five cryptocurrencies in terms of market cap.
Beyond 2019: What does the future hold for Litecoin?
Predicting the future performance of any cryptocurrency is an extremely difficult task. In the case of Litecoin, there are a few key opportunities and challenges that could impact the coin’s value in the months and years ahead.
Launched in 2011, Litecoin is one of the oldest and best-established crypto coins out there. This means it’s widely available on a wide range of exchanges, has a reputation for credibility and also offers some key advantages when compared to bitcoin.
That said, it faces stiff competition from a host of other coins and, like all cryptocurrencies, faces a battle to achieve widespread adoption. The launch of LitePay, should that ever successfully occur, could be a key factor to support growth.
It’s also worth pointing out that Litecoin founder Charlie Lee made headlines in December 2017 when he announced that he had “sold and donated” all of his Litecoin holdings. This caused a backlash from some quarters, with critics pointing to the fact that Lee had cashed out when LTC was trading at five times the price it had been a month previously, and that he had also caused uncertainty about the future of Litecoin.
In his announcement, Lee wrote that it was a “conflict of interest” to hold LTC and tweet about it because he has so much influence. “I have always refrained from buying/selling LTC before or after my major tweets, but this is something only I know. And there will always be a doubt on whether any of my actions were to further my own personal wealth above the success of Litecoin and crypto-currency in general.”
Lee also pointed out that he would continue to spend all his time working on Litecoin, and some commentators have even suggested that Lee’s sell-off should help LTC in the long run.
Just like bitcoin, Ethereum and other popular cryptocurrencies, it’ll be very interesting watching the future of Litecoin unfold. Market competition and the battle to break into the mainstream are key obstacles, and the success (or lack thereof) of the LitePay system could have a big impact on Litecoin’s growth.
As always, remember that cryptocurrencies are speculative and complicated, so make sure you thoroughly research all the pros and cons of Litecoin before deciding whether or not you should buy.