One of the first altcoins to ever be, Litecoin, recently surged to a new all-time high above $350. The cryptocurrency, which was initially dismissed as a Bitcoin clone, and as such stayed in the single-digit USD value for years before it’s price suddenly started to climb earlier this year, to the point its market cap is now above $16 billion, according to Cryptocompare.
At press time, the cryptocurrency is trading at $304.1 as it is up by 9.7% in the last 24-hour period, and over 6,500% since the beginning of the year. Litecoin’s movement is seemingly starting to mimick that of Bitcoin, which surged from $7,200 to $17,7000 in the last 30 days.
The climb was somewhat expected, as the cryptocurrency ecosystem, to a certain extent, piggybacks on Bitcoin, since the flagship cryptocurrency is a gateway to other cryptocurrencies. With exchanges such as CME, CBOE, and Nasdaq adding Bitcoin futures contracts, cryptocurrencies are one step closer to mainstream adoption. No Litecoin futures contracts have yet been announced one these exchanges, however.
Another potential reason for the climb are the problems Bitcoin’s network is currently dealing with. Its rapid adoption led to a huge userbase that subsequently led to a troublesome network congestion with high fees and multiple-day transaction confirmation times becoming the norm.
Litecoin’s network isn’t currently dealing with these issues and, as such, its price surge may have been partly triggered by frustrated cryptocurrency enthusiasts trying to move their money around in a quick and efficient way.
Moreover, Litecoin creator Charlie Lee has recently been invited to several prominent television shows to discuss bitcoin futures and other cryptocurrency industry developments. He used these opportunities to pitch Litecoin as a solution that complements Bitcoin’s utility as a store of value.
— Oriel Morrison (@Oriel_Morrison) December 15, 2017
Given Bitcoin’s problems and its increased media coverage, various Litecoin supporters now believe various companies will start accepting the cryptocurrency as a payment method, given that Bitcoin’s high fees may lead to a poor customer experience.
Finally, once Litecoin started surging FOMO (fear of missing out) likely set in, and traders started buying the cryptocurrency to make sure they weren’t missing the opportunity to make money.
At press time, Litecoin’s price is seemingly starting to correct from its all-time high of $358.57. As the cryptocurrency’s creator pointed out days ago when Litecoin started surging, it’s risky to invest in cryptocurrencies and investors should know that Litecoin can either surge, or dive in a short amount of time.
Ok, 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! ?
— Charlie Lee [LTC] (@SatoshiLite) December 11, 2017