Investors are latching on to Litecoin not only because Bitcoin is now so expensive and possibly overdone, but also because it is actually a better alternative as it is more stable and has a lifetime cap of 84 million coins.
While the world has been mystified, gratified, stupefied or plain terrified by bitcoin’s blistering bull run, there’s another cryptocurrency that has posted a far steeper rise this year. Bitcoin has risen 1,731% since the start of 2017 but Litecoin – often referred to as the “silver” to Bitcoin’s “gold” – has risen a whopping 7,000%.
The fifth-largest coin by market-cap has, in fact, seen its value go up 124% since Sunday alone, when Chicago-based exchange operator Cboe launched trading of Bitcoin futures contracts, fuelling confidence in cryptocurrency. Litecoin is currently trading at around $308 up from under $4.5 at the beginning of the year. If the crypto frenzy continues, and the Bitcoinbubble does not burst, Litecoin might even hit $1,000 sometime next year.
Investors are latching on to Litecoin not only because Bitcoin is now so expensive and possibly overdone, but also because it is actually a better alternative. According to Investopedia, the world’s largest financial education website, Litecoin is more stable and has a lifetime cap of 84 million coins, which is four times higher than the total number of Bitcoins that can be mined. So, as demand increases, there will be a larger supply of Litecoins to meet it, at least initially.
Moreover, it not only boasts quicker blockgeneration – 2.5 minutes versus bitcoin’s 10 minutes so transactions will get confirmed four times faster – but is also easier to mine. Litecoin’s mining algorithms are significantly simpler so it can be mined on less powerful computers and consume less energy, which bodes well for its future. For cautious investors, its tradingprice also compares more favourably to Ethereum, the other biggie in the cryptocurrencymarket, which is twice as expensive.
Litecoin was created by Charlie Lee, a former Google engineer, in late 2011. “I wanted Litecoin to complement bitcoin-not compete,” Lee reportedly said at a Coinbase talk in March this year, adding that “Bitcoin can be used for like moving millions of dollars between banks, buying houses, buying cars. It’s really secure… Litecoin can be used for cheaper things.” The lower transaction fees on Litecoinsupport its use in day-to-day transactions.
But before you rush to get aboard this new gravy train, be warned that Litecoin’s founder himself isn’t popping the bubbly right now. “Sorry to spoil the party, but I need to reign in the excitement a bit… Buying LTC is extremely risky,” he tweeted on Monday. “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!”