Litecoin Price Analysis - Retest of all time highs on the horizon
Litecoin (LTC) has remained stable throughout the recent Bitcoin bull run. The cryptocurrency is now seventh by market cap, at US$3.77 billion, with US$230 million in trading volume over the past 24 hours. LTC has risen 111% since the lows in mid September and is up 1488% this year.
LTC is a Bitcoin clone created in 2011, with four times the total coin supply, and block times of 2.5 minutes allowing for quicker transaction confirmations. Compared to coins above LTC in market cap, LTC consistently has more transactions per day, which suggests it is undervalued based on utility alone.
Hashrate and difficulty have continued to increase throughout the year, suggesting sustained interest from miners even though other coins are more profitable. The Litecoin block reward is due to decrease from 25 to 12.5 coins around August 2019.
The Litecoin Rich List, suggests that most addresses hold less than 100 LTC, with very few addresses holding a majority of the coins. This suggests some degree of centralization of holdings, but also suggests a majority of users are minimally holding LTC. As these addresses shift towards more users buying and holding more coins, prices should theoretically increase. It’s also possible that many users see LTC more of a coin to spend and less of a coin with store of value potential.
This is admittedly not the best metric because a user can store 100 coins in 100 wallets or 1 addresses with no easy way of differentiating between the two. The largest addresses also tend to represent exchange cold storage.
LTC trading volume has been led by the US Dollar (USD) and Bitcoin (BTC) pairs on GDAX and Poloniex respectively. GDAX holds more than 50% of the USD volume, which can be attributed to a direct fiat on-ramp for customers through Coinbase, as well an increase in institutional trading on the exchange.
Litecoin creator Charlie Lee recently expressed his excitement regarding Confidential Transactions, which will be coming to Litecoin “when it is ready.” Lee argues that “fungibility is the only feature of good money that Bitcoin/Litecoin is missing.” These transactions are already being researched on Bitcoin, and are already offered on a host of other coins including DASH, ZEC, Monero, and PIVX.
A key property of fiat currency, fungibility, helps prevent specific coins or notes from being blacklisted from use, or tracked from person to person. Once the funds enter a bank account or are marked for identification, this is a different story. Any crypto payment is also interchangeable from any other, but most payments can be tracked the same way or using chain analysis. This makes most cryptocurrency transactions pseudonymous, and not anonymous.