Litecoin (LTC) traded today at $127 to the USD and 0.01569020 to BTC and has a 7-day change of +13.88%. Put into perspective, Bitcoin traded at $8088 to the USD at a price change of +14.07% over the last 7 days. In terms of market cap, LTC has a modest $7 billion cap while BTC’s stands at $137 billion. In terms of supply, there are 56,104,463 LTC in circulation compared to 16,980,500 BTC.
Now, you may be among the many who wonder why anyone should bother comparing Litecoin to Bitcoin. In cryptocurrency circles, Litecoin is silver to BTC’s gold standard. This means that LTC should be viewed at a certain ratio against BTC.
Both coins share the same codebase, are deflationary and utilize proof of work mining, albeit with different hashing algorithms. Whereas BTC supply is capped at 21 million coins, Litecoin’s cap is only four times higher at 84 million.
If you take the current price of $8000, then BTC is 62 times higher and 19 times bigger in terms of market cap. If that’s the case, then one thing is very clear here, this altcoin is very moment greatly undervalued. Given the assumption that the ratio should be just 4 times bigger, then Litecoin’s target price pegged on BTC should be 1/4, translating to about $2000. Likewise, the market cap should be somewhere around $34 billion.
At the current figures, LTC is still very much undervalued, but does it have the potential to hit new all-time highs in the future? I should think so. Most projections put it at $600 for 2018, but with the disparity in ratio, it could likely go even higher.
Let’s look at it this way; Litecoin has a number of advantages over Bitcoin and many other altcoins that put it in a strong position, chief among them its usability. While it may be utilized for other blockchain-based uses like smart contracts and so on, LTC is currently the only cryptocurrency designed and technologically equipped to be used as a currency. That means, it can be used as ordinary fiat money and, if crypto were to replace fiat, then LTC is better placed to do so.
While Bitcoin (and Ethereum) struggle with network issues, Litecoin provides faster and one of the cheapest transactions. To prove its commitment to network improvement, it is the first network to implement both segregated witness (SegWit) and Lightning Network. As the first to use these, the project was able to demonstrate how fast its network was by transferring 0.00000001LTC from Zürich, Switzerland to San Francisco, USA.
Here are a number of advantages that Litecoin has that should see it gain tremendously in the future:
- Litecoin is primarily a payment coin; its network is fast and cheap allowing adoption in the small mom-and-pop shops. Bitcoin will be used as a store of value.
- The rapid growth of markets offering LTC payment options likely to propel coin to mass adoption.
- The crypto doesn’t suffer too many price swings, and neither are they too volatile. The downtrend is generally smooth, giving it some of the kind of stability. The same can be said of its uptrend.
- The focus of the team and a community that generally avoids dysfunctional infighting. The reason there haven’t been too many frequent forks on the network.
Litecoin quickly becoming preferred payment currency
I like to think of Bitcoin as really the best coin for use as a store of value. Ethereum is a platform simply overwhelmed by the volume of dApps and smart contracts running on its network, while Bitcoin Cash lags behind for lack of commitment to implement SegWit and LN. This leaves LTC as the frontrunner in the provision of a platform for digital currency in small-scale payments.
The growing number of payment services, and merchant tools utilizing Litecoin point towards a future where payments will largely be made in LTC. Right now we have projects like Aliant Payment Services, Abra Global, and LTCpay.com.
Even the failed LitePay project was massive, and it shows what potential impact the coin could with such initiatives.
What the project needs are just one major push, aided by a mega-deal involving an established brand. Rumors of Amazon and Starbucks have been circulated before, proving that Litecoin presents a viable network for providing a global cryptocurrency payment system. If any of these came on board, then the value of Litecoin (LTC) could skyrocket.