Why is Litecoin (LTC) Price Surging in 2019? Can it Sustain the Momentum?
Litecoin (LTC) price has doubled since the start of 2019, what are the reasons behind this surge, and can the digital currency maintain this momentum?
Litecoin (LTC), promoted as the silver to Bitcoin’s gold, has risen dramatically over the last few weeks, start the new year at around $30 and reaching nearly $60 yesterday. This doubling in price comes at the heels of an Ethereum (ETH) rally which ended near the end of February.
Currently, trading at around $57, Litecoin has overtaken EOS to become the fourth largest cryptocurrency in terms of market capital. The question is, what is fueling this price surge, and can it last?
#1. Litecoin’s Upcoming Block Reward Halving
Many are citing Litecoin’s upcoming block reward halving as one of the reasons behind the surge. Starting sometime in the first week of August 2019, LTC block reward will be reduced from 25 to 12.5 (half). The reason why this can result in a price surge is that after the halving, the supply of LTC will drop, and general market dynamics indicate scarcity leads to price appreciation.
However, given how the halving is still about 150 days or so ahead of us, it is unlikely to be the main reason behind the recent LTC price rise.
#2. Litecoin and MimbleWimble (Beam partnership)
Early February we saw an announcement confirming cooperation between the Litecoin Foundation and Beam, working towards a MimbleWimble variant of LTC, with increased privacy.
“The Litecoin Foundation has approached Beam about possible cooperation to implement Mimblewimble via Extension Blocks on Litecoin.”
This move, given the established popularity and hype around the MimbleWimble protocol, can be attributed as the trigger for the February surge, which saw LTC price rise from around $30 to $45.
MimbleWimble (a term borrowed from Harry Potter) is a protocol which focuses on scalability and privacy and is implemented in two coins currently, GRIN and BEAM, both of which have strong VC support.
#3. Venezuelan Government-approved Crypto Remittance Service
The third major reason behind LTC’s price appreciation is the launch of a crypto remittance service for Venezuela, which has the government’s approval. This means Venezuelan’s can recieve crypto payments in the country, which will be converted to their local currency, the Sovereign Bolivar, upon payout.
Currently, the service only supports Bitcoin and Litecoin, and when it comes to the two cryptocurrencies, Litecoin is generally preferred due to faster transaction confirmation times and low fees. This can have two main implications, the first being that overseas Venezuelans can now buy and send Litecoin in minutes to their friends and family, and Venezuelans, in general, can buy up Litecoin to secure their wealth (and protect themselves against inflation), knowing that they can cash them out locally without any restrictions. In either case, LTC’s demand is poised to rise.
Can Litecoin Sustain the Momentum?
For now, given the developments above, Litecoin appears to be in a strong position and should see steady appreciation in the coming months unless the market as a whole suffers from a major setback.
Compared to the December 2017 all-time-high of around $365, the digital currency is still about 84% down, but its value lies in the large userbase and network, coupled with its suitability for quick, fast and secure micro-transactions.
Moving forward, as more institutional products are launched for Bitcoin, and possibly Ethereum, it would be interesting to note if Litecoin can get recognition at those levels as well and be considered, by Wall Street, the silver to Bitcoin’s gold.