Well, Litecoin is officially having its “To the Moon” moment. Will it head toward Mars or crash land on Earth?
Five days ago, the price of Litecoin was around $90. Today, it passed $390. Depending on your source, that’s a jump of 333% in just five days. During that time, we saw two big leaps: a 38 percent leap beginning on Thursday and another 29 percent jump starting Sunday.
Between the hours of 11pm PST and 6:24am PST, the cryptocurrency made another massive leap: rocketing from $225.82 to 390.70 (all prices here GDAX) a growth of 73 percent. That puts the 24-hour growth at 115 percent.
That price has settled back in to $382.09 at the time of this writing, and Coinbase has temporarily suspended all Litecoin transactions. Is this just a temporary dip or a sign of things to come? No one can know for sure, but let’s look at the factors causing the Litecoin bull run.
Possible Factors for The Surge
Bitcoin Growth & Futures Trading
Cboe launched bitcoin futures trading on Dec. 10, causing a spike in Bitcoin prices—and CME plans to launch its own bitcoin futures trading on Dec. 18. Charles Bovaird has noted that Litecoin’s behavior tends to have a direct relationship to Bitcoin’s. In this case, there are two possible ways Bitcoin might be positively impacting Litecoin:
- Increased activity in Bitcoin, due in part to futures trading, is trickling down to Litecoin and other cryptocurrencies
- The increased Bitcoin activity is driving up transaction fees and clogging the network, potentially sending users in the direction of Litecoin and Ethereum.
Especially as network speeds lag and transaction fees soar on Bitcoin, Litecoin may be an appealing trading alternative with its faster speeds and lower transaction costs.
Massive Influx of Users on Coinbase
Coinbase, the popular cryptocurrency brokerage, is adding around 100,00 new users per day, recently surpassing YouTube as the #1 app on the Apple App Store. Coinbase only supports three cryptocurrencies: Bitcoin, Ethereum, and Litecoin. As mentioned, the positive relationship between BTC and LTC might be playing in the latter’s advantage—drawing fresh eyeballs to the most popular crypto exchange on the planet.
Buyers Are Beginning to Understand Litecoin
As more people buy into cryptocurrency through Bitcoin through sites like Coinbase, it becomes much clearer to see how Litecoin’s speed and low fees are a benefit to them.
Many of these same buyers are buying due to the FOMO (“fear of missing out”) that the current crypto-craze is generating, possibly causing erratic buyer behavior—often in the direction of purchasing rather than sitting or selling. These buyers choose speed and convenience over diligent research of options—meaning they tend to buy in at the highest possible price, which further drives the price. Meanwhile, even experienced buyers are going in more on LTC in hopes of profiting off of the current surge.
Charlie Lee, Social Media, & Press
Charlie Lee, already a notable presence in the blockchain world, has recently undertaken something of a media blitz, appearing on both CNBC’s Squawk Alley and The Glenn Beck Program.
Reminiscent of the buzz around Ethereum that skyrocketed Ether prices from around $90 to around $410 in the spring, many mainstream outlets have begun actively covering Litecoin news, generating more visibility for the cryptocurrency.
Editor’s Note & Disclosure: The author participates in cryptocurrency markets. Neither the author nor Forbes endorses participation in any token sale or cryptocurrency investment, all of which have significant inherent risk. Seek advice from a financial advisor as well as do your own due diligence before considering investment.