#OhNoCrypto
Last year was an interesting one for Litecoin, as the Bitcoin spinoff — the so-called silver to BTC’s gold — had an acute surge of interest before and after its August “halving,” which saw the blockchain’s block rewards routinely cut in half.
With Litecoin’s rewards axed from 25 LTC to 12.5 LTC for just the second halving in the blockchain’s young history, many analysts watched for how that shift would affect the project’s vitals, namely its price, market cap, hashrate, and so forth.
Why? Beyond just merely tracking the health of the Litecoin network, many posited that Litecoin’s 2019 halving would offer some clues as to how Bitcoin’s next halving, slated for spring 2020, could play out.
And with the benefit of hindsight, Bitcoiners hope theirs will play out differently. As 2019 came to a close, the Litecoin price had dipped 55 percent — from $94 to $42 — since its halving just a few weeks prior, and the project’s hashrate had dropped some 70 percent in that same span.
As LTC miners were now competing for fewer coins without a major accompanying increase in the LTC price, many acutely shuttered their Litecoin operations to seek profits elsewhere.
The episode has proven to be an early case study in halvings that blockchain economists will surely analyze for years to come, wherever the cryptoeconomy goes from here.
Yet Litecoin didn’t completely go backwards last year, either.
From January 1st, 2019, to January 1st, 2020, the LTC price rose from $31.98 USD to $42.02, for an increase on the year of 31 percent.
That fight to $42 still puts LTC quite far from its astounding December 2017 all-time high of $375 (when the crypto’s market cap was $19.5 billion!), but the 31 percent rise in 2019 wasn’t bad for a project that some had hailed as effectively dead in 2018.
Accordingly, that all brings us to the here and now. How will Litecoin fare in 2020? That depends on all kinds of factors. For example, will the project’s developers make progress on bringing MimbleWimble via Extension Blocks?
With that said, there are no shortage of folks in the ecosystem that have opinions and what we should or shouldn’t expect over the next 12 months for LTC.
Known as “Satoshi Lite,” Charlie Lee created the Litecoin network in 2011.
Still active in helping to foster the project’s ecosystem, Lee is influential to many Litecoin stakeholders and controversial to others over having sold all his LTC holdings in Dec. 2017, the cryptoeconomy’s peak to date, to, as Lee has explained it, rid himself of a major conflict of interest.
Charlie Lee, Image from SFOX
As such, Lee has always received tons of questions about the LTC price, and perhaps he gets even more so now that people know he doesn’t hold the crypto any more.
Lee arguably gave his ultimate answer on the topic — and a very reasonable one that’s just as applicable today — to Anthony Pompliano on the Off the Chain podcast’s most popular episode of 2019. When asked at the time whether the crypto bear market was ending, Lee said:
“People always ask me if I think the price will go up or go down. If anyone tells you they know, they’re lying, right. No one knows if the price will go up or down. So the bear market … I’ve seen a few bull and bear markets … I’ve seen it where you think the bear market is over and it drops even further. And also sometimes it recovers and it actually doesn’t come back down. Who knows. I think it’s good we’ve seen some recovery, but don’t go, like, all in. I tell people never to go all in.”
Again, Lee’s “who knows” logic is just as valid now as it was then, and he assuredly still feels the same way as we head into the new year. Yet we also have more evidence as to what Lee directly thinks the next year or so may look like for Litecoin.
In a November 2019 interview with popular crypto YouTube channel DataDash, Lee was skeptical that the next big wave of crypto users would arrive in 2020 or 2021, which suggests the Litecoin creator envisions that any major adoption boons– and associated price rises for LTC — may still be some ways off. As Lee told DataDash founder Nicholas Merten:
“I think it’s going to take some more time. Right now, Bitcoin and Litecoin are still hard to use. I think the user experience is really important … We’ll get to a point where you’re using cryptocurrency and it’s just simple and you don’t even have to think about what’s happening in the background. Kind of like when you’re swiping a credit card, you don’t really know …
I think the same will happen with BTC and LTC. In the meantime, it’s definitely a good hedge against the current financial system. It’s a good new asset class. So I think people will get into this first as a hedge, a new asset class, and then people will start using it.”
Ryan Selkis: From Useless to “BTC Betanet 4”
Ryan Selkis, a co-founder of the Messari crypto research hub, ushered in the new year with his “Crypto Theses for 2020” write-up.
It was the second edition of his “Theses.” In the first from 2018, Selkis wrote a humorous “20 Bits of Investment Advice (This Is Not)” column and in it half-heartedly joked that LTC had become “useless” as the coin was heading into 2019.
Ryan Selkis, Image from YouTube
In his updated column for 2020, Selkis updated LTC’s prospects, though again in light-hearted fashion, to “BTC betanet 4.”
Litecoin has long been regarded as something akin to a faster, more experimental “in the wild” Bitcoin testnet, so Selkis’s update is indicative of how many in the crypto space are again looking on the project more favorably as its developers have recently doubled down on improving Litecoin’s privacy — something that, if pulled off, will make LTC both faster and more private to use than BTC, albeit less secure. That differentiation certainly counts for something, especially at a time when many top cryptocurrencies are still struggling with privacy problems.
WalletInvestor: $30.5
It goes without saying that there’s no accurate, fool-proof way of predicting crypto prices, or the prices of anything for that matter.
But we can take imperfect data sets and use them to make imperfect analyses, however good or bad the ensuing conclusions may be.
Cue in crypto prediction websites here. One of the most popular of these sites is WalletInvestor, which uses Machine Learning (ML) techniques to try and decipher where asset prices will be in the future.
“WalletInvestor’s … forecasts are based on changes in the exchange rates, trade volumes, volatilities of the past period, and other important economic aspects,” the platform’s builders explain on their site.
So WalletInvestor’s prediction system is far from perfect. But it does offer hard price predictions around which traders can try and figure out where things like LTC could be heading.
And as for LTC, WalletInvestor thinks 2020 will be a down year for the crypto. At the time of this article’s writing, the site predicts the coin’s price will sink some 39 percent on the year, from $50 to $30.58.
It certainly wouldn’t be unbelievable if Litecoin headed into 2021 trading at $30, but it’s ultimately best to take the specificity of this particular prediction with a grain of salt.
NVT & MVRV: Overbought and Oversold, Respectively
Let’s break down these two metrics as they currently pertain to Litecoin.
Let’s start with the NVT, which stands for “Network Value to Transactions Ratio.” For any given crypto, the NVT can be calculated by dividing its market cap by the USD equivalent of its daily transaction volume.
As one of the NVT’s pioneers, Willy Woo, explains on his website, a high NVT suggests an asset might be overvalued:
“When [the] NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.”
With that said, at the time of this article’s writing Litecoin’s adjusted NVT was ~232 per Coin Metrics. That’s pretty high, and suggests LTC might presently be overbought. For comparison, near LTC’s last local top back in June 2019, the crypto’s adjusted NVT bullishly went as low as 17.5.
Now let’s take a look at the MVRV, which is derived by dividing a crypto’s market cap by its realized cap, the latter of which is found by approximating the value paid for every single one of a given crypto via the sum market value of all coins per when they were last respectively moved.
Alas, the lower the MVRV, the more oversold a coin is, while the higher the MVRV, the more overbought a coin is. As of January 12th, 2020, Litecoin’s MVRV was 0.7.
If 0.5 is fullblown oversold territory and 2.5 is overbought, Litecoin isn’t far from that lower bound at the moment.
Akash Girimath: If $63, Maybe as High as $100
In a recent post, AMBCrypto analyst Akash Girimath argued that technical indicators suggested LTC had rally targets that could see the crypto perform in the $50 – $100 range in the months ahead:
“The upcoming rally has the following targets, $50, breaching this, LTC’s next target would be $63, followed by $78 and a retracement to $70. The next targets, if the momentum hasn’t dried out, would be $90 to $100.”
Willy Woo: LTC Breakout Maybe Near
“Litecoin Difficulty Ribbon now in recovery. Should set up a bullish breakout of the bearish channel. I wouldn’t be surprised if LTC leads a bullish breakout of BTC.” – Willy Woo
Crypto analyst and Woobull creator Willy Woo said the above quote on January 6th, 2020, in surveying the Litecoin Difficulty Ribbon metric, which tracks miner selling pressure.
Accordingly, Woo suggested that selling pressure from Litecoin miners was drying up, which could pave the way to a bullish price breakout for LTC.
In a later follow-up tweet on January 8th, Woo added that it increasingly looked like “the LTCUSD price chart [might be] breaking it’s 6 month long bear channel.”
John Kim: $60 to ~$175
Having billed himself as the “Chief Litecoin Evangelist,” Litecoin Foundation member John Kim is a familiar face to many in the LTC ecosystem.
As one would expect from an evangelist, Kim isn’t quiet on his views about Litecoin’s prospects. So what does he think could be in play for the coin in 2020 as one of LTC’s biggest bulls?
With $50 LTC now being reached, Kim thinks’ $60 is in reach in the short-term.
Moreover, in a December 2019 tweet about the Bitcoin halving, Kim suggested that the BTC price could rise some 300 percent and that LTC could see a proportional surge in acute buy pressure.
6 months prior to the Litecoin halving the price of LTC was at $34 and it topped at $140.
312% rise in price.
6 month prior to Bitcoin halving the price of BTC is at $7100.
312% rise from here will be $29,252. #StackSats in 2020 along with LTC bc it moves together.
— @johnkim77Chief Litecoin Evangelist (@johnkim77) December 15, 2019
When Kim made these comments, the Litecoin price was $43.76. A hypothetical 300 percent rise from there would bring the LTC price to just over $175.
It’s hardly a precise prediction, but Kim certainly doesn’t think such a price is out of the question.
63 million LTC circulating supply and 40 million LTC dormant for over a year.
Litecoin is in a really interesting point in its life. After being one of the cryptoeconomy’s early titans, the crypto has seen its raison d’être increasingly challenged by the bright specters of larger projects, namely Bitcoin and Ethereum.
Yet while the Litecoin development community could certainly be considerably more robust, the project has a fighting chance to continue carving out a place for itself in the ecosystem if it can make strides on the privacy front by actualizing shielded transaction capabilities for LTC.
If that happens, Litecoin’s stakeholders will be able to argue more easily that not should LTC be a top cryptocurrency, but that it should have a higher market cap and be viewed as a major competitor to altcoins like Bitcoin Cash (BCH), Zcash (ZEC), and beyond.
However, if development and community efforts stagnate or stay sideways in 2020, then the main prospect for a positive Litecoin price performance on the year lies in the hope that the BTC price will rise due to halving hype and ensuing acute buy pressure will spread to other coins, like LTC.
Chief Litecoin Evangelist
(@johnkim77) January 11, 2020
