What Makes Litecoin a Long-Term Asset?
Cryptocurrency is a relatively new technology, one that came with the promise of complete revolution and was tipped as ready to turn the financial world completely on its head. As of now, crypto has not yet reached its true potential, it has so far struggled for consistency and reliability.
However, this was to be expected. For such a radical technology, people will need time to get to grips with it, and the tech has been improved over the years to make it more commercially viable. In recent news, the number of long-term Litecoin holders has doubled in the past year. What does this mean for the Litecoin price and the future of the asset? Read on to find out.
A New Litecoin Milestone
Last week, cryptocurrency analytics platform IntoTheBlock released data on Litecoin asset holders. According to research conducted by the firm, the number of addresses holding Litecoin for a period of 12 months or more has doubled over the past year.
The total number of these long-term Litecoin holders has surged to five million, from around 2.5 million at this point last year, an increase of approximately 96%.
According to analysts, this is a clear indication of growing confidence in Litecoin, with investors looking at it more favourably as a long-term asset. Instead of constantly buying, selling and trading Litecoin, it’s now being used more as an investment option, indicating that investors are confident the asset will appreciate in value over time.
How Has This Affected the Litecoin Price?
Litecoin is currently sitting at a price of $60.52. This represents a decrease of 22.9% over the past 30 days and of 1.51% when we look at it on a year-on-year basis.
Last week, Litecoin was priced at approximately $63. When the news about the long-term holders broke across social media and crypto news platforms, the coin saw a jump and was just shy of breaking the $64 threshold.
However, since then Litecoin’s value has dipped, reaching a low of $58.2 before coming back up to settle at around $60.
If we look at Litecoin’s price performance over the past five years, it’s clear to see that the asset has failed to reach the heights it did in May and December 2021, where it reached values of $347.72 and $257.74 respectively.
Since then, Litecoin has been on something of a downward trend. It seems strange then, that we’ve seen such a significant uptick in the number of long-term holders. Why is this happening?
Why is Litecoin an Attractive Long-Term Option?
As we mentioned above, many cryptocurrencies have failed to achieve true mainstream acceptance. While the reasons for this are myriad, much of it has to do with the technology that powers these digital currencies, and as the tech improves, we can expect to see crypto integrated more into our everyday lives.
Litecoin has been around for over 10 years and remains to this day one of the most popular cryptocurrencies, currently 15th in terms of market cap. This longevity in the notoriously unpredictable crypto world isn’t luck, it’s a result of solid technology backing the asset that makes it an ever-constant option for investors and traders.
Additionally, Litecoin has several advantages over other coins, most notably long-standing rival Bitcoin. Litecoin has greater scalability capabilities and faster transaction speeds, with the potential to process 54 transactions per second, considerably more than Bitcoin which can only handle five per second. Litecoin also has lower transaction fees, making it a more suitable option for payments.
Furthermore, Litecoin has a system in place that can offer greater privacy and anonymity for users. These attributes are highly prized in the crypto world, so this advantage has proved key for Litecoin as it worked to stave off emerging competition.
What Next for Litecoin?
The above benefits we’ve listed will certainly have played a part in making Litecoin an attractive long-term investment option. However, we’ve also seen Litecoin adopted by a number of global brands and businesses. This will have inspired further confidence in the asset, demonstrating to potential investors that Litecoin is safe, reliable and legitimate.
We’ve seen huge brands like Twitch and American Red Cross integrate Litecoin into their business operations. Peer-to-peer payments company MoneyGram also allows US-based customers to buy and sell Litecoin across its digital platform.
Where next for Litecoin? It’s been a tough time for the crypto industry recently. Financial scandals such as the collapse of FTX have eroded trust in the sector, and the increasing threat of widespread regulation and governmental crackdown is hanging over crypto’s head like the sword of Damocles.
Litecoin has shown remarkable resilience in these trying times. With the news that long-term holders of the coin have doubled, we’ll only see more people turn to Litecoin. It has proved itself durable and versatile, key traits that all cryptocurrencies must have if they want to survive.
The number of long-term Litecoin holders doubling over the past year is good news for the asset. It could signal the start of a positive period for Litecoin, and investors will hope it indicates the start of a potential bull run.