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Five Reasons Behind Litecoin’s Price Surge
The cryptocurrency market has seen a steady bull run in the past week. Like other top five cryptocurrencies, Litecoin’s price has been on a steady rise. Indeed, the altcoin recorded an unprecedented 333% rise in just a week. This includes a 9-hour 38% jump on Thursday night (PST), a 29% surge on Sunday and a 73% spike on Monday. LTC is currently trading at $297.41 according to live data from Coinmarketcap. Here are five key reasons behind Litecoin’s price rally.
- The recent launch of Bitcoin futures trading
On December 10, CBOE launched futures trading, causing a further surge in the price of bitcoin. On December 18, CME will launch its own Bitcoin futures trading, and Bitcoin’s price is expected to react positively. According to Charles Boivard, Bitcoin’s behaviour has an impact on Litecoin. For instance, whenever there is an increase in activity around Bitcoin, several other altcoins seem to react positively. Additionally, Bitcoin’s increased activity is clogging its system. This translates to high transaction fees on the Bitcoin platform, something that could be driving users to other altcoins.
- Massive users signing up on Coinbase.
Coinbase is becoming one of the most popular cryptocurrency brokerage firms. The firm, which only allows trading of Bitcoin, Ethereum and Litecoin, has seen its user numbers rising in the recent past. Market data shows that the firm is adding an average of 100, 000 users on a daily basis. One might ask, how does this enhance the rise of Litecoin?
While most people on Coinbase are keeping an eye on the Bitcoin, everyone wants to buy a piece of Litecoin now that it’s trading at single digits. And this explains its recent surge.
- Buyers are learning more about Litecoin
As more people trade in Bitcoin, they begin to slowly understand how other altcoins work. Litecoin’s speeds and low transaction fees are a major attraction for buyers, who are beginning to understand the altcoin through their exposure to Bitcoin.
- There are many inexperienced buyers out there
The current cryptocurrency craze is driving buyers towards impulse buying as they fear missing out. As such, few buyers will undertake serious research before sinking their money in cryptocurrency. Most will be inclined towards buying, as long as the cryptocurrency in question is showing some signs of a future rise in price.
- Social Media and the press
The current buzz in the world of cryptocurrency, which is fuelled by Bitcoin’s runaway price surge, has forced media outlets to actively cover the five biggest cryptocurrencies. Because Litecoin is one of these, it is benefitting from the growing publicity brought forth by social and mainstream media.
It doesn’t help that Charlie Lee, who is the founder of Litecoin, has recently been featured in a number of mainstream media outlets. All this continues to provide more information to cryptocurrency buyers, which in turn raises the altcoin’s profile.
It is has been a good few months for Bitcoin and other altcoins so far, but it is hard to predict whether the cryptocurrencies will sustain their bullish form in the long run. Litecoin’s founder Charlie Lee has cautioned buyers of a possible multiyear bear run, which might see the altcoin drop to lows of $20.
On the flipside, there is the possibility of Litecoin gaining more popularity in coming days, especially now that the saturation of cryptocurrency is still low.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Chris Bentley via Flickr