Most of the focus has been on Bitcoin over the course of 2017. It is the original cryptocurrency and has by far the highest total market capitalisation. It has also seen its price surge around 1500% over the course of the year. As little as a week ago with its value up at close to $20,000, gains were closer to 2000%. A correction since has brought the price back down to the $14,000-$15,000 range.
However, another of the major cryptocurrencies has actually seen 2017 returns that dwarf those of Bitcoin.
Litecoin, a rival to Bitcoin that claims to address several weaknesses in the dominant cryptocurrency’s technology, had risen in price by 6000% between January 1st 2017 and December 27th! Those investing online in Bitcoin have undoubtedly had a phenomenal 2017 but anyone who had a flutter on Litecoin did even better!
Litecoin’s history dates back to 2011, two years less than Bitcoin. A former Google engineer, Charlie Lee, was the brain behind the cryptocurrency. Some other Bitcoin competitors, such as Ethereum, are quite different and are not really intended as a direct alternative to fiat money. They are used in a more specific ecosystem. Ethereum’s Ether cryptocurrency, for example, is only intended to be spent within the Ethereum blockchain platform, used to build smart contracts and decentralised applications. Litecoin, on the other hand, is a direct rival to Bitcoin and has many similarities.
Litecoin sees its superiority in the fact that its blockchain processes transactions more quickly than Bitcoin and for lower fees. ‘Mining’, the process of verifying cryptocurrency transactions which is incentivised through the award of new cryptocurrency units, is also less energy intensive. The amount of electricity consumed mining Bitcoin and its carbon footprint is beginning to become one of the biggest criticisms of it.
Most major cryptocurrencies have, this year, seen their values skyrocket. Much of this has been by hanging on to the coattails of Bitcoin, which has raised awareness of the entire cryptocurrency market. A large part of the price boost has to be attributed to those investing online in Bitcoin diversifying into other cryptocurrencies. However, Litecoin’s technical qualities arguably making it a more viable large-scale payment system than Bitcoin are probably why it has done so well this year. Comparatively around 4 times better than Bitcoin.
So how high can Litecoin go from its current value of around $240? That’s obviously impossible to tell with any real certainty considering how volatile and unpredictable the cryptocurrency market is. Many experts believe the market has become a huge bubble over the past 12 months and will pop spectacularly at some point next year. Even Litecoin’s founder has publically called on investors or users not to buy Litecoin if they are not prepared to accept that its value could drop back down to $20 at any given moment. Lee has gone on record as saying he expects a multi-year bear market for cryptocurrencies following 2017, before the market returns to rising prices at a more sustainable rate based on fundamentals.
Others are, however far more optimistic. Quoted recently in The Telegraph, David Drake, an investment manager for wealthy family offices, is a Litecoin optimist. “In six months it’s going to double, there’s no doubt in my mind.” He does go on to qualify that statement by saying that as with any investment in cryptocurrencies, anyone investing in Litecoin should only do so if they are prepared to lose the whole investment.