Litecoin as digital silver next to the thriving Bitcoin digital gold narrative has done about as well as silver has during gold’s rally to new highs.
Oddly, the digital and physical counterparts have both lagged behind their more valuable brethren. However, that could soon change and Litecoin could ultimately benefit from the success of Bitcoin. Here’s why.
A Rising Tide Lifts All Boats, But Litecoin Continues To Drown
The cryptocurrency market looks much differently than it ever has in the past. Among the main reasons behind that, is the fact that Litecoin is no longer in the top ten ranked by market cap.
XRP has also fallen from the third rank due to issues with the United States SEC, so aside from Ethereum and Bitcoin, an entirely new breed dominates the industry.
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But Litecoin might only be down and not out, and could benefit solely due to the runaway success of Bitcoin, according to one analyst.
According to their tweet, LTC is better suited for smaller transactions, and offers Lightning Network channels to keep fees at a minimum. Both are key reasons as to why the altcoin could benefit from BTC. But there’s a lot more.
An Adam and Eve bottom could send Litecoin higher | Source: LTCUSD on TradingView.com
An Adam and Eve bottom could send Litecoin higher | Source: Why LTC Is Primed For A Comeback Against Bitcoin
The reasons outlined above are definitely factors related to Bitcoin and its success that could also spill over into Litecoin. Litecoin is born from the Bitcoin Core code. Like Bitcoin, there is a scarce supply of only 84 million LTC – or four times that of BTC.
Among its many similarities, it relies on Scrypt for mining instead of SHA256, which could be a differentiating factor that lets Litecoin not only perform well thanks to Bitcoin, but even outperform the top cryptocurrency.
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It might even perform well in spite of it, as Scrypt is the same hashing algorithm used by Dogecoin, which Elon Musk got behind due to it being more energy efficient than Bitcoin.
If green cryptocurrencies become the new narrative, then digital silver will get its time to shine. Silver, like gold, has several industrial uses. However, silver is tied even more specifically to green energy initiatives, making the digital silver nickname all the more fitting for the altcoin.
The downtrend continues against Bitcoin. When will it end? | Source: LTCBTC on TradingView.com
The LTC/BTC chart shows many years of underperformance against the first ever cryptocurrency. Each Bitcoin is 200 times more valuable than each Litecoin, yet the supply is only four times as large. The math doesn’t add up, and when the market finally realizes this, it could be a recovery for the record books.
Will there soon be a spark again in the altcoin known as digital silver?
Featured image from Deposit Photos, Charts from TradingView.com
