Litecoin is going up
Litecoin is currently sitting at +32% growth for the last 24 hours and is an excellent case study for following the news with crypto investments.
Litecoin is often considered the digital silver to Bitcoin being the digital gold. The underlying tech is fundamentally a copy of Bitcoin and during the parabolic moves of Bitcoin in 2013 followed behind, peaking at $48.48. Litecoin crashed at the same time as Bitcoin and while Bitcoin has been on a two-year bull run, Litecoin has stagnated, rarely rising above $5. This was until last month when the team starting implementing key technology upgrades which sections of the Bitcoin community have been trying to push through. If you read my previous post on Bitcoin, you will note that there is a scaling issue with the tech and there are two communities of divided opinion on solving the issue of full blocks in the chain. As mentioned my preference is Segwit, which Litecoin is rumoured to be implementing last month leading to a first movement up to over $10.
With Litecoin the miners supported Segwit, and it officially became locked in last week. My original position on Litecoin was very small, just over £100, which tripled during this period. I did not increase my holding during the Segwit rumours due to the previous two years of Litecoin stagnation but did take a new position when Segwit became locked in. I divested two BTC into Litecoin as two other key rumours are circulating which will likely drive further price increases:
1. Litecoin could be added to Coinbase
2. Litecoin could be activating the Lightning Network
I started to follow Charlie Lee on Twitter, he is the inventor of Litecoin and Director of Engineering at Coinbase. He has been gradually releasing further information on the plans for Litecoin, and I am convinced that Coinbase will happen, which would lead to more liquidity and naturally a price increase.
The Lighting Network activation is also something which gives me the confidence to increase my position; a technology upgrade which allows for instant, scalable, low-cost transactions at high volume, thus solving an issue which is plaguing Bitcoin.
Litecoin started to move this morning, reaching a +15% over the last 24 hours and then early this afternoon it was then announced that Litecoin had been added to Coinbase, which any of you who have downloaded the Coinbase app will now be able to see. We are now at +33.6% for the last 24 hours.
For many, this would be a good opportunity to take profits, but as I mentioned previously, I am not a day trader and therefore do not play the markets. I think enough is happening for Litecoin to be a solid long term hold.
Firstly, there is the Lighting Network as mentioned above, but I also think that Litecoin may become a base coin for more of the exchanges like Bitcoin and Ethereum. The addition to Coinbase adds significant credibility and will likely lead to the other major exchanges reacting too.
But where does this leave new investors? I wouldn't suggest buying Litecoin as your first coin today; this is a risky move as a retrace usually follows any significant growth before the price stabilises. This may be scary for new investors. I do though think that Litecoin should be part of any portfolio as its market cap is now over $1bn, a significant milestone. For any new investor, I would wait 24 hours before entering or watch for a dip in the price to buy.
If you do choose to invest in Litecoin, then be prepared for some volatile movements over the next few weeks. I have a price target of $50 this year but will adjust this depending on the roadmap post Lighting Network. I will also be watching retailer acceptance of the coin too.
I won't be increasing my position today but may consider changing this based on where the price stabilises.