Over the course of the last seven (7) days, Litecoin has witnessed over 2,000 percent (%) increase in its value per unit moving from a base of about $89 to one Litecoin (LTC) up to a figure of $320 per Litecoin as at the time of writing this article. The question on the mind of many has been “what are the factors that have catalyzed this surge in the value of the altcoin?”
The first step to understanding this recent surge is to first get to know what Litecoin is. Litecoin was built on the back of Bitcoin and it was basically created to compliment Bitcoin’s efforts by allowing crypto-investors diversify their portfolio. Litecoin is one of the most prominent currencies on the market; it features regularly in the top five (5) cryptocurrency ranking on coinmarketcap.com by way of market capitalization.
Litecoin was created by a former Google employee, Charlie Lee who is also the Director of Engineering at Coinbase. Charlie has over 300 thousand followers in micro-blogging platform, twitter and is known to be one of the influencers in the cryptocurrency space. Though the recent exceptional performance of LTC has got him excited, he has urged calm and the need for people to be cautious as they increase their investment position in Litecoin.
By way of transactions and mode of operations, Litecoin is known to be faster with block generation taking about 2.5 minutes as compared to Bitcoin’s 10 minutes. Litecoin also has bigger block sizes and can process more transactions per block. There are also more Litecoins in circulation as compared to Bitcoins and this could possibly be a reason why the altcoin has been significantly cheaper than its much popular cousin Bitcoin. Some analysts however believe that Litecoin has been undervalued over the last couple of months and that this price surge is actually a value correction for the cryptocurrency.
So what is driving Litecoin’s value up? There is an emerging school of thought that seems to suggest that investors who missed out on the recent Bitcoin rally are choosing Litecoin as an alternative since it possesses some similar characteristics as bitcoin and is still much cheaper. These investors will rather own whole coin sums in Litecoin than hold decimal points in Bitcoin – this investment move could be informed by the fact that they envisage Litecoin attaining values in the thousands of dollars over the next couple of months and are seeking to take positions before the real rally actually happens.