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Since the start of January 2019, the price of LTC has increased dramatically during sustained trading volume. Denominated against BTC, it has nearly doubled.
Even though LTC regularly sits in the top five cryptoassets by market cap, there doesn’t tend to be much Litecoin news on the front page – which explains why everyone is scrambling to understand why Litecoin and LTC have seen so much success this year.
Here’s how LTC, denominated both in USD and BTC, has performed since January 1st.
In this article, we’ll analyze five factors that have the potential to contribute to an increase in LTC’s price. Then, we’ll zoom out and use a version of Chris Burniske’s cryptoasset evaluation model to consider what a fair price for LTC could be today under various assumptions.
What Causes Litecoin’s Price to Increase?
In contrast to some other blockchains and cryptoassets, Litecoin and LTC have a single, easy-to-understand use case: ever since Charlie Lee created them in 2011, Litecoin has been intended to serve as frictionless, borderless, peer-to-peer electronic cash. That means that the factors that contribute to fundamental increases in LTC’s price are fairly straightforward: any change that allows LTC to better function as frictionless, borderless, peer-to-peer electronic cash has the potential to theoretically improve its price. (At least in the short term. In the long term, a medium of exchange should have a relatively stable price, but LTC is still growing on its way to becoming full-fledged universal cash.)
The increase in price that Litecoin has seen in early 2019 could possibly be attributed to a constellation of five factors, all of which relate to Litecoin’s value proposition as digital cash:
- More merchants are accepting LTC as a medium of exchange.