Is Litecoin Overvalued?

shutterstock_774378934Coming onto the market shortly after Bitcoin, and carrying a similar name, Litecoin has had a rough time establishing itself as a free-standing, viable cryptocurrency. While there are those that believe in it as a strong coin in its own right, there are others that feel Litecoin is nothing more than a glorified testnet for future Bitcoin purposes. Even Litecoin’s developers have stated that the currency was intended to be the “silver” to Bitcoin’s “gold.” However, Litecoin’s star has risen dramatically since the end of 2017. In fact, this rise has outpaced Bitcoin’s, making Litecoin one of the more popular cryptocurrency investment choices for many new investors afraid of another “Bitcoin bubble.” But is the hype well-earned?

 

Is the Current Price and Market Capitalization Justified?

As of the middle of August 2018, Litecoin was worth $16.09 USD per unit, rising 10.66 percent in less than 24 hours. IT was released in 2011 and was able to reach a one-billion-dollar market capitalization within its first two years on the market. In 2017, the coin’s value rose even more, thanks to its early adaptation of the SegWit system, a way to increase the size limit for each block on the chain. While these are major accomplishments, it has still left many wondering if the current value and market share are justified.

The answer to that question is somewhat subjective. There are many cryptocurrency experts who firmly believe that thanks to the innovations made so far, including transaction processing times that are faster than those offered with Bitcoin. On the other hand, there are Litecoin detractors, who argue that the large number of available coins dilutes the market. The fact that Bitcoin, and other types of cryptocurrency, have adapted these innovations made by Litecoin also lends some credence to the argument that it is basically a third-party testnet.

 

What Features Are They Currently Working On?

The developers behind Litecoin are currently working on a few different features. One of them is the new Litepay system, which allows all Litecoin users to directly send or receive Litecoin. This system also gives them an easy way to exchange Litecoin for traditional forms of currency, removing the need for a third-party wallet. Experts believe that this could dramatically increase use of Litecoin in the future.

An update has recently finished going through the consumer testing phase and is going to be rolled out to all Litecoin users very soon. It is going to affect quite a few features. One of the biggest features is the lowered minimum relay fee, which was done to support a reduced transaction fee in a subsequent update.

 

What is the Future for Litecoin?

Litecoin’s future is very bright. By August 2018, it had made a gain of over 60 percent from its value at the beginning of the year and doubled its value in 2017. While a lot of this is due to the technological advances and Litepay system discussed earlier, some is because of Litecoin’s ambitions. At the beginning of 2017, developers were in talks with Amazon. While these discussions ultimately fizzed out, they did prove that Litecoin can form meaningful partnerships with large organizations, such as financial and commercial institutions. The ease with which consumers can trade traditional currency for Litecoin, thanks to Litepay, makes cryptocurrency accessible to a much wider market.

For years, Bitcoin ruled cryptocurrency, barely touched by its competition. Over time, altcoins emerged that garnered a lot of attention, such as Ethereum, Monero, and Ripple, overshadowing Litecoin. However, Litecoin has been slowly building steam, and is gearing up for some major moves. So far, it has gone against the cryptocurrency tide, rising dramatically where others, such as Bitcoin, have fallen.

Whether or not Litecoin is overvalued depends entirely on perspective. Those that have faith in one of the early alternatives to Bitcoin or those who enjoy first-time applications of innovative technology do find value in Litecoin. To be fair, there have been many times over the past 12 months that Litecoin has outperformed Bitcoin, leading many investors to consider Litecoin the safer bet. On the other hand, Bitcoin has historically performed better, is more widely accepted, and often adapts technology tested out by Litecoin once there is evidence that it works well. Ultimately, the value you find in Litecoin is based on what you hope to get out of investing in it.

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