Litecoin (CCC:LTC-USD) is likely to rebound before the end of the year along with other major cryptos like Bitcoin (CCC:BTC-USD). According to Coinmarketcap.com Litecoin is the 13th largest crypto in the world, with an $8.8 billion market capitalization. Assuming Bitcoin and Ethereum (CCC:ETH-USD) move back up significantly during the fall, I expect Litecoin will do so as well.
Source: Wit Olszewski / Shutterstock.com
Today, July 26, Litecoin is at $132.03. It is up slightly for the year (+4.6%), since it ended last year at $126.23. But a year ago, LTC crypto was at $52.95. So, it is still up 149.3% in the past year.
However, according to Yahoo! Finance, its peak was on May 8 at $386.45. Therefore, it’s now down $254.42 from its peak, or 65.8%. Given Litecoin’s huge ride up and then down and the fact that it’s still up for the year is quite amazing.
However, I believe that Litecoin could end up moving back up, perhaps even to its former heights. There are several reasons why this could happen.
Trading Up With Bitcoin
Litecoin has historically traded up and down with Bitcoin. This may have to do with its origins.
Litecoin started in 2011 and was meant to focus on peer-to-peer (P2P) transactions. LTC’s founder, Charlie Lee, focused on making Litecoin a better “cryptocurrency for payments based on blockchain technology.” By better, he meant better than Bitcoin.
Now there are indications that Bitcoin could begin some sort of rebound from some catalysts. For example, Amazon (NASDAQ:AMZN) is considering moving into cryptocurrency and Bitcoin. Barron’s magazine wrote that Amazon posted a job site for a digital currency expert. The role of the expert is to “own the vision and strategy for Amazon’s Digital Currency and Blockchain strategy.”
However, late on July 26, things seemed to change. Amazon issued a statement denying media reports it was looking to accept bitcoin payments by the end of the year, according to Reuters. But its statement still left the door open: “Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true … We remain focused on exploring what this could look like for customers shopping on Amazon.”
And the job posting was not taken down. So Amazon is up to something. This probably won’t take away the speculation that it is going to do something in the crypto space.
If that happens, other retailers will look to mix Bitcoin or even Litecoin in their payments and business strategy. Moreover, speculation on this possibility could begin to move the crypto higher as well.
What to Do with Litecoin Crypto
It does not take a math genius to see that if Litecoin is correlated with Bitcoin, it is a much cheaper way to play any potential upside. For example, for $1,000 you can own 7.574 LTC tokens; whereas, at $37,352 for BTC-USD, you can only own 2.677% of one Bitcoin token.
That doesn’t necessarily mean you will make more money with Litecoin than Bitcoin. It just means that you can own more tokens. Nevertheless, if LTC has a higher propensity to rise when Bitcoin goes up, then your investment could end up being worth more, and vice versa.
So, be careful with Litecoin. It could end up being more volatile than Bitcoin and the ride could be more wild. But one thing seems reasonably sure. If Bitcoin recovers this quarter, Litecoin is likely to follow along.
On the date of publication, Mark R. Hake held a long position in Bitcoin (BTC-USD). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post Why You Should Expect to See Litecoin Rebound By the End of the Year appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.