Like all most major altcoins, the Litecoin price on exchanges typically rides on the coattails of Bitcoin. However, Litecoin’s long-term performance in comparison to other altcoins is starting to look decidedly poor.
Will Litecoin ever re-test former highs? While it might one day, there are nevertheless, a few troubling things worth considering about the long-term viability of Litecoin.
The Litecoin Price Seems to be 100% Speculative
Did you buy Litecoin in mid-2017? If so, you may have made a hefty profit in the run-up to January 2018. However, if you have been diligently holding since then, you won’t have made a cent.
Despite enthusiastic claims that Litecoin is Silver to Bitcoins’ Gold, Litecoin consistently plummets to mid-2017 price ranges, as soon as any rally in the cryptocurrency market is over.
In effect, the price of Litecoin seems to be stuck in a paradoxical time loop. This is resulting in some analysts starting to see Litecoin as having little but completely speculative value.
The Litecoin Use Case is No Longer Clear
Continually regressing to mid-2017 price ranges is nothing unique to Litecoin. DASH, Bitcoin Cash, and several other altcoins all behave much the same way. However, it is the existence of altcoins like Bitcoin Cash, which makes it unclear what exactly Litecoin brings to the cryptocurrency market.
- Litecoin bases its use case on its ability to settle transactions faster than Bitcoin. However, coins like DASH already settle transactions faster than Litecoin itself.
- New feature upgrades that make it easier to transact Litecoin privately are in progress. However, DASH, Monero, and other privacy coins, already make it easy to settle transactions anonymously.
- Claims that Litecoin is Silver to Bitcoins’ Gold, suggest that Litecoin has a use case as a secondary store of value. However, coins like Bitcoin Cash, Bitcoin SV, and DASH, are already scarcer than Litecoin. This makes each (arguably a better store of value, long-term.)
It is now also clear that Litecoin halving in August 2019, did nothing but briefly bump up the LTC price. Almost immediately after halving, after all, Litecoin was trading once again at mid-2017 price levels.
The Litecoin Foundation has a Major Funding Issue
Prior to the release of altcoins like Bitcoin Cash, the Litecoin use case was clear. However, since this time, Litecoin has begun to lack when it comes to innovation. Part of the reason for this rests with the Litecoin Foundation itself.
In the case of altcoins like DASH, on-going development of the DASH payment network is made possible by direct allocation of DASH mining profits. While unpopular, new taxes on Bitcoin Cash mining profits mean that Bitcoin Cash development is also self-funding.
Sadly, the Litecoin Foundation isn’t self-funding. Rather, the development of the Litecoin blockchain depends solely on donations. This is a problem, as donations at present are not forthcoming.
- Litecoin Foundation donations began to flatline in early 2019.
- At present, Litecoin creator Charlie Lee is using his own funds to help continue to pay Litecoin developers.
- To bring new privacy features to Litecoin, the Litecoin Foundation announced in January, that it still needed to crowdfund $57,000 to pay developers.
Will the Litecoin Price Eventually Rebound?
Not being self-funding is a major challenge for Litecoin, especially given the fact that investors treat LTC as a largely speculative asset.
As it stands, relying on donations is not sustainable for the Litecoin Foundation, given that more holders now look to sell LTC after new price highs. As a case in point, trading Litecoin for DASH during halving last year would have seen smart traders retain 50% more profit than they would have by continuing to hold Litecoin.
Thankfully, Litecoin riding on the coattails of Bitcoin may yet see Litecoin reach new all-time highs. The only question is, will investors once again sell when it does? Moreover, if they do, might this result in yet more development funding issues in the near future?