Bitcoin’s Biggest Rival? Litecoin Stabilizes After Massive Correction
After a volatile 24 hours, Litecoin prices showed signs of stabilizing Friday as investors speculated about the digital currency’s ability to de-throne bitcoin.
LTC/USD Price Levels
The LTC/USD exchange rate plunged 26% on Thursday to touch the lower $74 level. At the time of writing, prices had recovered near $82.50 for a total market cap of around $4.5 billion. The cryptocurrency had virtually doubled between Nov. 2 and Nov. 29 in a period of general euphoria for cryptocurrencies.
Litecoin wasn’t the only digital asset to suffer a double-digit correction earlier this week. Bitcoin Cash and Ethereum also plunged more than 20% on Thursday. Both currencies found stability on Friday, although Bitcoin Cash was still headed for weekly declines of more than 20%.
Litecoin’s precipitous drop followed another record-setting surge that took prices above $100 for the first time ever.
Turnover in LTC trades has reached $429 million in the last 24 hours. About one-fifth of the activity was concentrated on the GDAX exchange. Bitfinex and South Korea’s Bithumb also saw roughly 11% of the daily volumes.
The cryptocurrency market was in a state of buzz Thursday after The Motley Fool ran a compelling story about Litecoin’s potential to overtake bitcoin.
Litecoin’s price trajectory since the start of the year has largely mirrored the broader cryptocurrency market. However, its exposure hasn’t come anywhere near bitcoin’s or some of the other leading altcoins. According to Motley Fool writer Sean Williams, this has more to do with creator Charles Lee taking a back seat in the development of the token. Recent developments suggest Lee is now ready to put his full weight behind the project.
“Litecoin certainly has what it takes to give bitcoin a run for its (virtual) money,” Williams said. “Recently, Litecoin completed the highly anticipated SegWit upgrade, which has been critical in improving the capacity of its blockchain, hastening settlement times, and reducing the costs to process transactions. Doing so should help attract businesses and, perhaps, investors.”
It didn’t take long for the Litecoin Foundation to temper expectations about the coin’s potential. In a Nov. 29 tweet, the Foundation said it doesn’t believe its cryptocurrency is the biggest competitor for bitcoin. It also reiterated its focus on transaction processing.
“Bitcoin and Litecoin will have different focuses. Litecoin will definitely focus more on payments,” the tweet said.
Despite vastly different market caps, bitcoin and Litecoin share many similarities. Both algorithms put a hard cap on the number of coins that can be created. They’re also much older than the latest wave of altcoins sweeping the market. Whereas bitcoin was created in 2009, Litecoin came on to the scene in 2011.
For a long time, LTC was the no. 2 cryptocurrency in terms of market value and overall trading volume. Despite slipping to the likes of Ethereum, Bitcoin Cash and Ripple XRP, Litecoin is still considered to be the silver to bitcoin’s gold.
Bitcoin prices spiked above $11,000 on Thursday for the first time in its history. Prices have since moderated back down to the mid $9,500 region.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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