After the Litecoin (LTC) price has gained new momentum, it is about time for an LTC analysis. In the night of February 8th, the Litecoin price suddenly shot up by more than 10% (to $38) despite the bear market and then continued to rise steadily until it replaced EOS as No. 4 in terms of market cap.

A lot of investors are therefore already itching to buy. But what is the coin all about and will LTC be able to maintain its new upward momentum in the long term? Here you will find the answers.

What sets Litecoin apart from Bitcoin?

Litecoin has long been established as a top 10 coin and is therefore well worth a closer look – especially for investors looking for Bitcoin alternatives. In fact, the coin has already been around since 2011. Since then, the decentralized peer-to-peer cryptocurrency is often referred to as the silver in comparison to Bitcoin being the gold of cryptocurrencies. But what’s the difference between the two popular coins?

Litecoin is one of the first forks from Bitcoin that was meant to solve some of the basic problems of the first cryptocurrency in terms of bottlenecks and scalability. Thus, the biggest difference between the two digital currencies is its transaction speed – which is 4 times faster than BTC – as well as the lower transaction costs. In a nutshell, this means that LTC does the same job as Bitcoin, but much faster and cheaper – and on top of that with a more decentralized mining network.

What LTC critics have to say

Since the two currencies have so much in common, LTC inventor Charlie Lee and his coin, which is a clear competitor of bitcoin, are repeatedly exposed to strong criticism, despite Litecoin’s position in the top 10. In an LTC analysis of crypto-hedge fund Multicoin in September 2018, the author, manager Tushar Jain, listed the most common criticisms.

Jain’s main arguments:

• Litecoin is not innovative enough.
• Litecoin does not stand out enough from the competition (its biggest competitors are Bitcoin Cash, Ethereum and the Lightning network).
• Litecoin is just a Bitcoin test lab and as such, it has no intrinsic value.
• The low transaction fees cannot be maintained in the long term.

Inventor Lee’s counter arguments:

• LTC’s unique selling points are that the LTC network is one of the safest networks and leader in the scrypt mining market.
• The Lightning network does not make LTC obsolete because it will be compatible with BTC through it. In addition, Litecoin is already supported by many Lightning network clients.
• Even if Litecoin was used as a Bitcoin test lab, that fact alone would not make it inherently worthless.

Lee’s full list of 11 tweets, in which he counters the individual arguments of Jain in detail, can be found here:

In any case, since the discussion took place, several months have passed and a lot has happened. During this time, contrary to its image as an innovation-shy project, Litecoin proved that it is quite capable of some serious innovations that can make investors to perk up their ears.

LTC Analysis: The current state

During the bear market, on the 8th of February, the Litecoin price suddenly jumped 10% from $ 33 to $ 38. Even after that, its unstoppable rise continued to $ 43. This helped the cryptocurrency take the fourth place in terms of market capitalisation after Bitcoin, Ripple and Ethereum, that was previously held by EOS since 2018. By now, LTC has a market cap of $ 2.6 billion.

With the new price increase, the coin has also broken through its 200-day moving average, so, at least for LTC, all the current signs point to a new bull market. However, as the crypto world in general has still not broken out of its downwards trend since the beginning of 2018, no premature conclusions should be drawn.

These plans for 2019 might give Litecoin a boost

First of all, let’s take a look at why, despite the bear market, the Litecoin price suddenly soared. After Litecoin was repeatedly criticized for its lack of innovation, there have been several exciting announcements for the coin lately.  By implementing new scalability and privacy solutions through the open source developer community, the cryptocurrency has made significant progress in the past few months.

Confidential transactions

Since the beginning of the year, the focus has been mainly on the implementation of solutions, which were originally developed for Bitcoin in 2016. One of these innovations is the introduction of confidential transactions that don’t disclose the user’s identity. The system should be completed by 2019 and was announced in a tweet on January 28 by Charlie Lee himself. Not a bad idea at a time when privacy coins are becoming increasingly popular.

Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy.

I am now focused on making Litecoin more fungible by adding Confidential Transactions. ?

— Charlie Lee [LTC⚡] (@SatoshiLite) January 28, 2019

The implementation of Mimblewimble

Approximately Two weeks after Lee’s announcement, Beam announced a collaboration with Litecoin on its Medium blog . The goal of the collaboration is “adding privacy and fungibility to Litecoin by allowing on-chain conversion of regular LTC into a Mimblewimble variant of LTC and vice versa.” This way, users will be allowed to conduct 100% confidential transactions using Mimblewimble LTC.  The results of the partnership will be released as open source, so that in the future everyone can replicate the improvement to privacy for other projects as well.

Why Mimblewimble was chosen is quite simple: Mimblewimble is an advanced privacy protocol that makes tracking each source very difficult. In addition, since when its implemented, several transactions fit into each block, it also offers a high scalability.

In addition, because the expansion blocks remain compatible with the old nodes, there’s no hard fork required. An update of the protocol for running Mimblewimble is therefore not necessary. The new data protection is a completely optional LTC feature.

Despite the bear market, LTC does pretty well

Since the start of the bear market at the beginning of 2018, the development activity for most coins has declined sharply and the funding of startups has largely dried up. In a Medium report in November, Meltem Demirors wrote:

“[…] many crypto projects that raised money through an ICO face massive challenges to stay relevant and create real purpose. This is what happens when you lack a true finance function, and unfortunately, ‘crypto finance’ is still nebulous and undefined on the whole.”

However, despite the hard times, many of the larger cryptocurrencies, such as Bitcoin and Litecoin, have made significant progress, laying the foundation for new users to enter the cryptosphere and prepare for the next boom.

The new engagement of the developer community, which has already started to implement the new innovations for Litecoin, also seems to be an important key factor for the further price development. As early as 2017, a study by Ivey Business School professor JP Verge has identified a high level of developer activity on the underlying blockchain of a crypto asset as the best indicator for the future price trend of a coin. Jameson Lopp cites the study in a tweet as follows:

"We found that the best predictor of a cryptocurrency's exchange rate is the amount of developer activity around it." – @PirateOrg

— Jameson Lopp (@lopp) July 5, 2017

A Litecoin price forecast promises a rosy future

In any case, the 30% rally on Friday has shown that Lee’s plan seems to work. After all, during the crypto-winter, it does not happen very often that positive news immediately cause such a sharp rise in prices. Whether the price can stabilize in the future or even increase further remains to be seen.

So it’s about time for a Litecoin price forecast, because what would an LTC analysis be without a prediction of future price developments?

Savvy investors are looking forward to the upcoming Litecoin halving

For the future development of the coin, two things are particularly interesting: On the one hand, the hopes of investors are very much focused on the LTC block reward halving which will take place on the 8th of August. After the halving, Litecoin miners will receive only half the previous reward to validate a new block.

As this will cause the amount of new LTC added to the network to decrease, the event may well increase prices. In the past this has already been confirmed in the crypto world. However, since it is the most popular digital currency, most investors usually focus the Bitcoin halving. The next block reward halving of BTC will be on the 24th May 2020, though, so that the Litecoin halving which happens much sooner will likely not be overshadowed by its big brother this time.

The increasing interest in LTC’s price development and the anticipation of the Litecoin halving are already visible in Google Trends. This means the way for an LTC bull run without any major obstacles is already paved.

The whole crypto market is predicted to boom in the third quarter of 2019

Most crypto analysts forecasting the future of the crypto market development for 2019 are mostly focusing on the third quarter of the year. This is mainly due to the fact that at this time, the market entry of large investors is expected, which could give the entire crypto market a major boost. More than a few crypto enthusiasts therefore believe that from autumn on, we could be looking at a new bull market, which – as a top 10 currency – would, of course, also benefit Litecoin.

In any case, after a long break Litecoin investors finally seem to be in for exciting times again.

What do you think?

After having read our LTC analysis, do you think that Litecoin is worth an investment in 2019? We look forward to your comments.