An early pioneering cryptocurrency, Litecoin is having its time in the sun as it enjoys a robust resurgence amidst a backdrop of market uncertainty and relative undervaluation.
After surviving all Bitcoin cycles and going through a tumultuous period, partly due to fleeting market interest in shiny new vapourware, the cryptocurrency is gaining momentum.
Litecoin’s dollar price has risen by 183% since its June lows in 2022, with a 60% increase in the last two weeks. The surge is due to several factors, including its resilience through all bear markets, surging adoption, its upcoming halving event and its one-sided value-proposition.
Litecoin resilience
In a long-form analysis by Reddit user u/TarkovRedditor, Litecoin’s resilience in market downturns has made it an attractive and safe bet for many investors. Since 2017, only 41 assets outperformed bitcoin, and Litecoin is among them. Litecoin has climbed through the crypto ranks over the years, overtaking centralised Solana by marketcap just last week. Litecoin stands alongside Bitcoin and Ethereum in terms of popularity, and is frequently used as a means of payment.
Another factor that’s contributed to Litecoin’s resurgence is its relatively skewed undervaluation in comparison to its OG peers, Bitcoin and Ether. Despite trending lower against Bitcoin and Ether since 2014, Litecoin broke away from its trajectory since June 2022, setting technical higher lows ever since. During the bear market, Litecoin has demonstrated its staying power in another cycle, which stands in contradiction to the common optics with which it is viewed.
The technical picture, combined with its increasing adoption and developmental inroads as a scarce means of payment has made Litecoin an attractive investment on multiple levels, catering to a wide array of market needs. Major stores and countries accepting Litecoin as a means of payment could also increase its value over time, unlike fiat currencies which can only lose purchasing power over time.
Upgrades, regulatory clarity & more tailwinds
Its recent upgrade, MimbleWimble Extension Blocks (MWEB), has also played a role in its ongoing resurgence and success. Rolled out in May 2022, the upgrade enables LTC users to have the same privacy features enjoyed by fiat-currency cash users. That is, keeping account balances and transfers private. Coupled with the upcoming halving event in August 2, 2023, these confluent factors and tailwinds have made Litecoin an attractive cryptocurrency of choice.
Beyond that, regulatory clarity has boosted Litecoin’s appeal even further. Amidst a wave of regulatory abrasiveness, in large part characterised as a propensity for most crypto assets to be ‘unregistered securities’ in all but name, Litecoin’s status as a digital commodity is not in question. More broadly, proof-of-work consensus mechanisms more readily fall under a digital commodity status as opposed to proof-of-stake chains, which tend to closely resemble securities.
It’s not just crypto enthusiasts who have taken note of Litecoin’s resurgence either. With its listing on EDX markets, institutional adoption has ramped up, increasing the digital commodity’s already robust market depth and legitimacy even further.
At $7.8 billion in accrued market value, Litecoin is a top ten cryptocurrency by market capitalisation. Its widespread availability, usage, privacy-rich support and undervaluation compared to its peers – Bitcoin and Ether – has contributed to continued positive sentiment around the coin.
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