Fertile Soil for the Epic Rise of Litecoin?
All eyes are on Litecoin. Largely regarded as undervalued, Litecoin bests its rival Bitcoin in both speed and more affordable transaction fees. After the push for Bitcoin futures, which helped catapult the number one cryptocurrency toward $12,000, mass adoption by retail sellers like Amazon is the next logical step for cryptocurrencies. E-commerce platforms will aim to satisfy customers in two key respects: fast transaction speeds and low fees.
With a processing block time of 2.5 minutes versus 10 minutes for Bitcoin, Litecoin is positioned to capture future adoptions. But while Bitcoin continues to offer such huge returns for any online retailers and businesses that accept it as payment, the rise of Litecoin will still be predicated on the attractiveness of Bitcoin as the gold standard. The equation may change if and when miners flee Bitcoin because it is no longer economical.
This would slow processing times, as it did in recent months when Bitcoin’s transactions took several hours. The slow speeds triggered Bitcoin’s 29% dip in price on November 13th. This chain reaction of mining influence over the next phase of cryptocurrencies is still at play. As more investors pour fresh fiat into Bitcoin and altcoins, more confidence in the viability of digital cash will drive incentives for more businesses and retailers to begin adoption.
Litecoin has gained nearly 2000% in 2017 on a market cap just over $5 billion or only 2.6% of Bitcoin’s $191 billion. This is also the year that the number of unique Litecoin transactions has started to increase to roughly one-tenth of the number of Bitcoin transactions. Again, Litecoin’s current price does not reflect this ratio.
As crypto enthusiasts and mainstream adopters move past the news of Bitcoin futures, ease of use and feasibility will remain key drivers of Litecoin’s impressive price action. While Litecoin is well positioned to soar, whether or not it masters the field and becomes the dominant player, or even a more widely adopted coin, also depends on increasing competition from altcoins vying for the top spot.