Here’s How And Why Litecoin Could Become The Next Bitcoin

Bitcoin has been grabbing all the headlines over the last week or so on the back of its reaching all time highs just shy of $20,000 a piece before correcting to current levels in and around the $16,000 mark at the end of last week.

Another coin, however, has increased in value by a substantially higher multiple this year than has bitcoin – Litecoin. This week, Litecoin reached $150 a coin for the first time ever. On some of the more liquid exchanges, it’s going for as high as $190 a piece.  At the start fo this year, LTC went for around $5.

Why is this a big deal?

Many reading will likely have seen other so-called altcoins and ICO tokens run further this year and – as such – might be inclined to ask why a 3,000% or so run in Litecoin is that big a deal. The answer is rooted in prominence. Litecoin may long have been deemed the silver to bitcoin’s gold and – sure – over the past few years, it hasn’t gained anything like the traction that bitcoin has gained from a mainstream awareness and adoption perspective.

Litecoin Daily Chart

As we said last week, however, this is more to do with the driving forces behind the coin than it is to do with anything else and, with this disparity in scale of push between bitcoin and Litecoin closing of late, things are rebalancing.

Charlie Lee, the guy who created LItecoin, is now behind the drive for mainstream adoption full time. Previously, he was tied up as an engineer at Coinbase. While he was at Coinbase, a billion-dollar industry sprung up to drive the price of bitcoin upwards and, as the numbers above show, has been incredibly successful at doing just that.

We think Litecoin is next in line for this push.

The thing is, Litecoin is superior to bitcoin in many ways. It’s lighter (from an efficiency perspective), it’s quicker (from a transaction verification time perspective) and it’s far more durable in the sense that it can handle a maximum capacity of 56 transactions per second (while bitcoin can only handle seven and Ethereum can handle just 15).

As bitcoin adoption increases, transaction fees increase based on the difficulty rate associated with transaction verification increasing. At the same time, processing time increases (it shouldn’t, inherently, but it does as the Mempool gets flooded).

In turn, then, as bitcoin adoption increases, the problems associated with its widespread use are going to increase in prominence and – at the same time – people and companies are going to start looking for alternatives. Litecoin is an incredibly stable coin with a dedicated and very large following and, at the same time, has an established network of nodes in place that are processing transactions (mining).

It stands to reason, then, that as bitcoin adoption increases, the necessity for an alternative should arise. Litecoin provides one of the best, if not the best, alternatives in the space right now, so we can expand on the previous sentence and say that as bitcoin adoption increases, the popularity of Litecoin should increase.

While many won’t highlight this connection as being one of the primary reasons that Litecoin is rising in line with bitcoin, it very much is.

So what comes next?

We expect the current correction in bitcoin to translate to some Litecoin buying and – if this is the case – we don’t see Litecoin dropping back below the $150 mark anytime soon, if ever. As the overarching trend reverses to the upside in bitcoin, we expect Litecoin to track the trend and – with the added bonus of Lee’s presence pushing for mainstream adoption – we think there’s an awful lot of run room left for Litecoin going forward.

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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 BTC Keychain via Flickr