which altcoin has the best risk return ratio believe it or not but the answer could be Litecoin the crypto that’s famous for Branding itself as the silver to bitcoin’s gold reports that a spot Litecoin ETF approval is imminent have caused LTC to pump in recent weeks at first glance it looks like speculation upon closer inspection however you realize there’s a fundamental reason to be bullish on LTC and that’s why today we’re going to do a deep dive into Litecoin explain why its fundamentals are bullish and reveal just how high LTC could go this is a video you will want to watch until the end all right folks first things first nothing in this video is financial advice it’s purely educational content intended to inform you about Litecoin I’ll also note that nobody at the coin Bureau holds LTC as part of their personal crypto portfolios at the time of posting and of course our analysis will be objective if you want to know of the way it’s been almost 4 years since we last covered Litecoin so it’s uh safe to say that a refresher is in order Litecoin was founded by software developer Charlie Lee Charlie first got into crypto in 2011 when popular online poker websites were debanked and shut down in the US this made Charlie understand the power of decentralized money which of course got him into Bitcoin and other cryptos back in 2011 most cryptos were Forks I.E copies of Bitcoin that were nothing more than pump and dumps and this inspired Charlie to create a fork of his own called Litecoin in October 2011 the difference was that Litecoin had a fair launch I.E there was no premine and there were no investors there was one similarity to other cryptos however and that was that Charlie also founded a nonprofit called the Litecoin foundation in Singapore to overc litecoins development the Litecoin Foundation has since registered as a bonafied nonprofit profit in the USA I’ll explain why that’s important a little later on now as noted in the introduction lightcoin was basically created to be the silver to bitcoin’s gold from Charlie’s perspective BTC is primarily intended to be a store of value like gold and is not ideal for day-to-day transactions by contrast LTC is primarily intended to be a medium of exchange and is ideal for day-to-day transactions much like gold and silver in the olden days when silver was used as currency the result is what you see under the hood both Litecoin and Bitcoin use a proof of work consensus mechanism however litecoin’s block time is four times faster than Bitcoins allowing Litecoin to process around 50 transactions per second compared to Bitcoins 7 which makes LTC better for payments the newly issued supply of LTC and BTC is also cut in half every 4 years but ltc’s total Supply is four times larger than btc’s 84 million versus 21 million the Practical effect of this larger Supply is that LTC maintains a smaller price tag as the market cap grows which also makes LTC better for payments the one thing that Litecoin has that Bitcoin doesn’t have however is privacy in May 2022 Litecoin added mweb to its blockchain which stands for wimble Nimble extension blocks uh for context wimble Nimble is a privacy protocol proposed by a pseudonymous crypto developer back in 2016 as for extension blocks these can be simply understood as a separate set of blocks that run parallel to the main blockchain and are validated by the same set of miners a litecoin’s mweb essentially acts as an optional privacy layer for LTC transactions and holdings this likewise makes LTC better for payments it’s also more significant than you might think because Litecoin has historically acted as the defacto test net for the Bitcoin blockchain important upgrades such as segwit and tapro were first implemented on Litecoin before being implemented on bitcoin logically this potentially foreshadows an mweb layer for Bitcoin as well if that wasn’t interesting enough Litecoin is technically the reason why Dogecoin exists back in 2014 Charlie convinced Dogecoin founder Jackson Palmer to merge mine Doge with LTC to ensure Dogecoin survives in the long term as the term suggests merge mining makes it possible for the same set of miners to secure multiple proof of work blockchains without extra power or Computing resources what’s fascinating is that doa’s unprecedented price appreciation has made merge mining LTC and Doge three to four times more profitable than mining BTC not only that but the fact that LTC and Doge have been merge mines since 2014 suggests that Litecoin miners are the Dogecoin whales as you’ll soon see these Dynamics could have a profound implication for both the crypto mining industry and the crypto market and case for Litecoin which can be summarized in one word Integrations take a second to consider that LTC is one of the oldest altcoins out there and it has close connections to BTC the result is that you’ll find LTC almost everywhere you’ll find BTC even more because of the payments component and here are just a few examples of some of these Integrations in October 2021 one of America’s largest banks launched a crypto custody service for its clients offering custody for BTC bch AKA Bitcoin cash and LTC uh for reference Banks were subsequently restricted from offering crypto custody by the SEC and these restrictions were recently lifted which foreshadows more American Banks offering custody for LTC in November 2021 AMC Theaters announced it would accept crypto payments supporting BTC eth bch and LTC a few months later Bitcoin cash supporter Roger via declared that the top contenders for a decentralized digital currency were bch LTC and Doge and I’ll remind you that LTC and Doge are linked if you watched our previous Litecoin update you’ll also know that LTC was one of the most widely supported cryptos on ATMs back in 2021 a 202 24 report from coin ATM radar suggests this is still the case and underscores the fact that you’ll almost always find LTC wherever you find BTC this isn’t just true at the retail level but at the institutional level too a Fidelity one of the world’s largest asset managers added support for LTC in July 2024 of course the only other two cryptos Fidelity supports are BTC and eth now consider that great scales Litecoin trust once traded at an 18 times premium in 2021 for those who don’t know premiums on grayscales trust products suggest that there’s an enormous demand from institutional investors for the altcoin in question uh to put things into perspective the premium on grayscales salana trust was nine times in late 2023 when Souls started going parabolic the fact that the premium on grayscales Litecoin trust was once twice as large suggests strong institutional demand and this is further evidenced by the fact that we’ve seen multiple asset managers file for spotlight coin ETFs over the last few months the filings appear to have taken place in October 2024 and Bloomberg ETF analysts believe these ETF applications have a 90% chance of being approved by the end of the year and this begs the question of why large institutional investors seem to be so bullish on LTC there are two answers a surface level answer and a much deeper answer the surface level answer is that LTC is effectively a higher risk higher reward bet on BTC just like silver is a higher risk higher reward bet on gold LTC is just as accessible as BTC both practically in terms of all the different ways you can buy it and store it and theoretically in terms of its narrative everyone can understand the idea of Litecoin being a digital silver and it’s a narrative that most institutions and Retail investors would actually invest in the deeper answer though is that some crypto investors likely see Litecoin as being what Bitcoin was supposed to become if you watched our video about the Bitcoin Wars you’ll know that institutions wanted to increase bitcoin’s block size to make it faster more programmable and all sorts of other things the result of the Bitcoin war was the creation of Bitcoin cash which like many Bitcoin Forks has claimed to be the version of Bitcoin that’s most in line with the idea of digital cash described in the Bitcoin white paper by satosi Nakamoto the problem with many of these Forks is that they’re badly governed uh there’s lots of infighting which has resulted in more forks and a lack of coordination in their ecosystems by contrast though Litecoin has good governance just because it has a straightforward vision of being well digital cash it also has a single active founder who continues to push the project towards that vision and this is actually something that Charlie has explicitly stated in interviews especially in recent years in other words Litecoin is a version of Bitcoin that can evolve at the speed that investors want this sounds crazy until you look at who has been speaking at litecoin’s conferences in recent years there have been many interviews and presentations with early Bitcoin developers who believed in the digital cash Vision such as Paul stalk all of them would start by saying something along the lines of uh to be clear I’m a Bitcoin maximalist and I’m nervous to be here but I think Litecoin could implement this it’s not just the developers either Litecoin conferences in recent years have featured key players from the Bitcoin mining industry such as bitmain who highlighted the fact that there’s been an explosion in demand for Litecoin mining machines due to their insane profitability which you’ll recall is due to the emerg mining of Doge as well as other newer altcoins that have since launched and on merg minded with litecoins chain what’s truly crazy is that back in 2022 antpool partnered with the Litecoin Foundation to launch LTC labs to accelerate litecoin’s development LTC Labs is funded using half of the revenue from antp pool’s Litecoin mining pool and FYI antpool was founded by bitm and is one of the largest crypto mining pools if this sounds familiar that’s because some asset managers have done the same thing with Bitcoin are using a portion of their spot Bitcoin ETF fees to fund development the difference here is that Charlie has also committed to match the donations made to the Litecoin Foundation over the next 5 years a donations which are tax-free in the US thanks to its 2021 American incorporation and this Rel to the moment you’ve all been waiting for and that’s ltc’s price action and potential I’ll start with a fun fact and that’s that LTC was the third crypto ever listed by coinbase as a matter of fact Charlie once previously actually worked at coinbase and it’s a reminder of just how deep and strong litecoin’s connections are in the crypto industry we’ve honestly only just uh scratched the surface of the tip of the iceberg here on that note some of you will know that Charlie infamously sold all his LTC when it first went parabolic in 2017 the result was that Charlie was labeled the most hated man in crypto by some media outlets in retrospect it was a wise move not just for regulatory reasons but for the long-term health of the project Charlie claims that he still doesn’t hold much LTC are just enough for testing purposes anyways like many altcoins that have been around for a long time time LTC just barely managed to break above its previous all-time highs in May 2021 funnily enough that’s when we posted our last LTC update back then we predicted that LTC would rally to $1,000 unfortunately that didn’t happen fortunately it looks like it could happen this time and that’s because of that one golden word we talked about earlier integration if you watched our video about why most altcoins have been underperforming but some have been outperforming you’ll know that it’s due in large part to the structure of the crypto Market the easier it is for more money to flow into crypto the more money will flow into it all else being equal obviously the most accessible cryptos in this sense are BTC and eth which is a big part of why they’re so big what’s not so obvious is that LTC is just as accessible and soon this will be true even in terms of spot ETFs and yet LTC is currently trading at a fraction of the market cap of BTC and eth if LTC receives even a fraction of the investment that BTC and eth got it could grow a lot due to its small size for those unfamiliar it’s a crypto’s market cap that determines how big it could grow not its price tag the smaller the market cap the more a crypto can grow make no mistake LTC will not become as big as BTC or eth by market cap anytime soon if ever but it really looks like this Gap is going to narrow evidence for this can be seen in ltc’s price relative to BTC and E although LTC has ried a lot in fat terms over the last few years it has continued to fall gradually against both BTC and eth while this is likely to continue in the long term in the short term the LTC BTC and LTC eth charts are looking very bullish in fact the LTC eth chart appears to be breaking out on the monthly time frame which shows that LTC is gaining strength against eth and will continue to do so technical analysis suggests it could rally back up to the 2019 levels which would translate to a gain of roughly four times relative to eth the LTC BT C chart looks like it’s about to follow suit and could likewise rally back up to the late 2018 levels which would translate to a gain of roughly four times as well relative to BTC if we assume that BTC hits a cycle top of around $150,000 which is a conservative estimate this will translate to an LTC top of around $900 this makes sense given that there would probably be lots of front running of the $1,000 level conversely it’s possible that crypto Wales could purposely push LTC above $1,000 to liquidate Traders and cause retail investors to fomo at the worst possible time as such the $900 to $1,100 range could be it whether LTC could rally up to that range ultimately depends on its upcoming Milestones uh we can separate these into external milestones and internal Milestones external mil Stones include the approval of the spotlight coin ETFs and you’ll recall there’s a 90% chance of that happening in 20125 another external Milestone is the one that everyone seems to have overlooked and that’s the possibility that LTC could be part of the upcoming X payments platform in case you missed the news fireblocks recently revealed that X money would be ready to support crypto payments by the end of 2025 it’s safe to assume that the these will include BTC Doge and LTC particularly given elon’s connections to Dogecoin more about that rabbit hole in the description now as for internal Milestones the focus has been on development specifically around litecoin’s mweb functionality the tldr there is that Litecoin developers are in the process of developing tools that make it easy to integrate private LTC transactions into popular crypto wallets in turn this will make LTC the ideal cryptocurrency for payments outside of stable coins due to its optional privacy function another internal Milestone is the one that’s likewise being overlooked and that’s the recent launch of wrapped Litecoin on etherium a wltc launched in November last year and it foreshadows LTC being used as collateral in defi protocols on ethereum and elsewhere this will make it possible for LTC whales to rotate into other altcoins by borrowing stable coins against their LTC instead of selling them and you can learn more about how this could boost altcoins using the link in the description moving on now there’s one small problem with litecoins development and that’s the fact that the funding appears to be lacking the Litecoin foundation’s last Financial disclosure from 2024 notes that it had just a few $1,000 in annual funding something Charlie later confirmed in interviews speaking of which Charlie’s own donations to the Litecoin foundation will only total $250,000 per year which sounds like it will be just enough to fund its existing crew and not much else it’s not clear how much money LTC Labs has gotten from Ant pool’s contributions but the fact that there have been no updates on its website in recent years despite it being active suggests it hasn’t gotten very much and this of course brings me to the the challenges that we foresee for Litecoin and the first is that aforementioned funding Litecoin might be aoling faster than Bitcoin but well that doesn’t say much it’s not moving fast so to speak a case in point the mweb upgrade was proposed way back in 2019 it wasn’t released until 2022 and the initial release didn’t include things like integration tools for wallets which continue to be worked on the good news news is that Litecoin appears to be accelerating the pace of development with additional funding which although small should still move the needle the bad news is that an extra few $100,000 won’t be enough to turn LTC from a $10 billion asset to a $100 billion asset and this ties into the Second Challenge and that’s competition in theory LTC is Digital Silver in practice LTC is digital cash which is a double-edged sword on the one Edge it makes Litecoin the version of Bitcoin that many Bitcoin ogs believed in and it’s wild that some of them are not so subtly backing Litecoin right now on the other Edge however it puts Litecoin in competition with other payment focused cryptos in the modern day this includes smart contract cryptos like Sal and stable coins which have also integrated privacy preserving features similar to mweb yes yes they’re not trustless but most users they don’t actually care the Bitcoin ogs who believed in the digital gold Vision understood that trying to compete on the digital cash front would result in a race to the bottom in terms of centralization and to maximize speed and minimize fees Litecoin seems to have entered this race and it won’t win against centralized EVC chains like salana and this relates to the third Challenge and that’s narrative most investors appear to see LTC at the surface level as a digital silver most investors don’t know or don’t care about the deeper struggles around the Bitcoin vision of digital Cash and The crucial role that Litecoin had and continues to have there well if you’ve ever looked at a chart of Silver’s price you’ll notice that it looks eerily similar to ltc’s just on a much longer time frame it’s just been a series of speculative pump and dumps over the past few decades just like LTC has had over the past few years it’s been a higher risk higher reward bet on gold and not much else the silver lining in litecoin’s case pun intended is that Litecoin is a cryptocurrency and that means it technically consists of two components Litecoin the blockchain and LTC the coin and this makes it possible for LTC to do do things that silver can’t like allowing for private transactions on a secondary layer at the same time LTC can do things that most cryptos can’t like be mind alongside multiple other cryptocurrencies just like how silver can be mined alongside other minerals in case it wasn’t clear enough this has made Litecoin mining very profitable it’s possible that LTC will Outlast most other cryptos for this reason maybe even BTC since each Haring has made life harder for Bitcoin Miners and you can find out what will happen when the last BTC is min using the link down below so although Litecoin is definitely something of a dyo coin that certainly doesn’t mean it’s on the verge of Extinction quite the opposite in fact but what do you think let us know in the comments down below and if you want to watch our latest video you can do that right over here and if you’re not subscribed to the channel yet you can do that right over here this is Nick signing off see you guys soon
