The Real Reason the Price of Litecoins Is Rising.
The price of Litecoin soared to a record high $300, quickly occupying the spot that used to belong to IOTA as the fourth biggest Cryptocurrency in the world. CoinMarketCap listed the Year to Date increase as more than 4,000%.
This has got analysts wondering, why is the price of Cryptocurrencies rising? Some are also wondering if the rise in the price of Litecoin has anything to do with the Bitcoin. Most importantly, analysts are wondering, when will this soar in price end. These issues are addressed in this article. However, for the noobs, a quick introduction to Litecoin.
What is Litecoin?
Created by former Google Employee and Director of Engineering at Coinbase, Charlie Lee, Litecoin exists to give investors an opportunity to diversify their digital currency portfolio. It was the first alternative to Bitcoin. The most significant difference is that it takes less time to generate a block, compared with Bitcoin. There is also the fact that Litecoin has more coins in circulation, which makes it quite affordable and easier to make transactions with. The affordability part may change anytime soon.
Why is the Price of Litecoins Rising?
This is one question analysts are trying to answer. As I said earlier and you probably know, Litecoin is now worth $300. According to Ari Paul, a popular Bitcoin analyst and co-founder of BlockTower, the market cap of Litecoin has exceeded the value of the entire cryptocurrency market just 15 months ago.
Charlie Lee started by announcing hat Litecoins surpassed the $10 Billion mark. Consequently, it’s YTD value has increased by more than 4,000%.
Shortly after this statement, Bitcoin exceeded $10 billion, jumping to $15 Billion. There was a price increase of nearly 80% within less than 24 hours after the initial market valuation. Now, analysts are not able to attribute this jump in price to any single event. However, the general argument is that the price surge was due to a universal increase in interest and high demand for cryptocurrency market
Is This the Right Time to Invest in Litecoins?
There is a high possibility that the high performance of Bitcoins over the last couple of months has impacted the price trend positively. Considering the fact that it’s a cheaper alternative with lower fees and faster confirmation, this hypothesis is not so far-fetched. However, it’s not a reason to invest in the altcoin.
Lee has advised investors to approach Litecoin with caution. He explained that every bull run has been followed by a bear cycle as far as cryptocurrency is concerned. This implies that the current 80% rise in the price of Litecoin could lead to a major correction in the short term.
In his words, “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,”
Bottom line, invest only if you can handle the risk and not afraid of losing your money.