Litecoin price prediction for 2020
Is it going to the year that the cryptocurrency starts catching up with its more high profile rivals? What is Litecoin’s future price?
Here is a sobering thought. If you had bought Litecoin in January 2017 you would have paid around $3 (£2.30 or €2.7). If you had sold it a year later it would have been worth just over $300. You could have pocketed $270 for each coin. Not a bad return.
With a track record like that it is no wonder Litecoin is very much on the radar of crypto enthusiasts. And Litecoin price predictions are eagerly sought by investors in crypto who want to look beyond Bitcoin.
Yet what is Litecoin, and what makes it different from Bitcoin? And are there any factors that mean it will perform differently from other cryptocurrencies in 2020? Here is our Litecoin price prediction for the coming year and beyond.
Differences between Litecoin and Bitcoin
Litecoin, for reasons that we will delve into in a moment, is often referred to as the silver to Bitcoin’s gold. It was created in 2011 by a Google employee, Charlie Lee who saw Litecoin as a response to some of the alleged weaknesses of Bitcoin.
In particular he wanted to significantly speed up the time that coins took when processing payment. He achieved it too, so for example if you buy a product with Bitcoin it will typically take a minimum of 10 minutes to resolve, which isn’t ideal if you are buying coffee. With Litecoin, the key being in the cryptocurrency’s name, the process is completed in 2.5 minutes.
Another potential advantage of Litecoin is that there are many more coins available to miners than there are Bitcoin, hence the silver to Bitcoin’s gold comparison. Litecoin is also easier to mine than Bitcoin and miners can largely work with shop-bought PCs rather than having to invest in the specialised equipment needed for Bitcoin.
In August 2019 Litecoin halved, a process in which the number of coins awarded to a successful miner drops by 50 per cent in this instance from 25 to 12.5. We will look at the impact that halving has on Litecoin’s price prediction shortly.
Litecoin recent history
Overall then Litecoin is one of the most popular cryptocurrencies, yet will it remain in this position? What is our best guess as to a Litecoin price forecast?
The first clue as to the future performance of any cryptocurrency is to look back and examine its history. The transformative year for Litecoin was 2017. At the start of the year its price was around the $3 mark. At its absolute peak in mid-December of that year it was selling for more than $300.
Within a year though it had dropped to as low as $30. Its current price is pegged at around $40. Interestingly, the first half of 2019 saw a steady rise to around $140 as June turned into July. But the price fell rather dramatically and year on year it is up by around $5, not much of return.
So why the price fluctuations? Well like most other altcoins, the name given to cryptocurrencies which aren’t Bitcoin, Litecoin’s price often mirrors the fortunes of its higher profile and more popular rivals. In many ways the surge in late 2017 and ongoing collapses of 2018 was an analogue of Bitcoin. Both currencies were fuelled by the hype around blockchain, the growth of Initial Coin Offerings (ICOs) and the general optimism that cryptocurrencies would one day replace fiat currencies. Both succumbed to falls as the crypto bubble burst.
This year has a slightly different story. For the first half of 2019 the trajectory of Bitcoin and Litecoin was similar, following a steady upward curve, perhaps regaining some of the ground lost during the collapse of 2018.
The peak for both cryptos was June/July, however this is where they diverge. Bitcoin has fallen losing some 40 per cent in value yet for Litecoin it has dropped 250 per cent, a highly significant collapse. Incidentally, both cryptocurrencies enjoyed a "Halloween surge" inspired by pronouncement about blockchain by the Chinese President Xi Jinping, but neither have been able to capitalise on that mini boom.
Litecoin creator Charlie Lee explained that the movements are often a result of community actions rather than the halving itself. “So a lot of people are buying in because they expect the price to go up and that’s kind of a self-fulfilling prophecy. So, because they’re buying in, the price does actually go up.”
One of the key theories as to why Litecoin has fallen so much in the second half of 2019 is based around its halving procedure which occurred in August. It is an event that only happens every four years and has a notable impact on the price of the coin. In this instance the coin price shot up, only to fall as the date for the halving approached.
To sustain itself, Litecoin needed its miners to carry on mining with the same intent in spite of a 50 per cent drop in rewards. It seemed as if this was the case hence the mini spurt.
For a few weeks before the halving it appeared that Litecoin was going to hold most of its new price. There were optimistic noises from Litecoin champions such as John Kim, who told Cointelegraph: “I don’t expect the halving to significantly affect the price in the short term. Miners will keep maintaining and even increasing Litecoin’s hashrate and therefore the network will continue to chug along and be secure and not create any sudden panic with a sudden drop in hashrate.”
But then came the sell-off as investors began to cash in and the price drop, no doubt impacted by a fall in Bitcoin, took hold.
So at the end of 2019 Litecoin is slightly up year on year but a long way off its midsummer peak.
The price of Litecoin is likely to be affected by two main criteria, macro factors, namely phenomenon that will also impact other cryptocurrencies, and specific phenomenon related solely to Litecoin.
What then does 2020 hold for Litecoin?
History has shown us that the overwhelming impact on Litecoin’s price is driven by the former rather than the latter. This means that many of the predictions for the Bitcoin price will hold true for Litecoin.
At the current time, Bitcoin is around the $7,000 mark, nowhere near its all-time high of $19,000 but well up on its year start of $3,700.
The big event of 2020 for Bitcoin is likely to be the halving process which is slated for May 2020. Similar to Litecoin, this has traditionally precipitated a major surge in Bitcoin’s price and many people believe that this will occur again.
However, some commentators believe the impact of halving has already been priced in. They argue Bitcoin investors are more experienced than they were previously and have access to several more years of market data.
Other events that could impact on the price of Bitcoin, and by dint of association Litecoin too, are enthusiasm for blockchain in major powers, especially China, and the opening up of Bitcoin to more markets such as a Bitcoin ETF in the US.
Bitcoin champions such as Tim Draper are adamant that a major surge is due next year. In a recent interview with BlockTV, Draper reaffirmed his 2022 target of $250,000 per Bitcoin. Further, a poll of more than 350 financial professionals undertaken by blockchain analysis company Chainalysis, revealed that more than half of them are backing Bitcoin to outperform the S&P 500 stock index in 2020.
Then traders such as Rakesh Upadhyay have argued that bulls are still not aggressively buying at the current price levels of around $7,000 because they are not confident that a bottom is in place. It may not be a question of how high will Bitcoin go, but how far it still has to fall.
There is however a converse to the theory that Litecoin will mirror Bitcoin in the near future. One of the key issues that Bitcoin faces is scaling. If it is not successful in overcoming technological challenges to achieve this, then Litecoin may be one of the key beneficiaries. Some, though not many, analysts think that Litecoin could even be Bitcoin’s successor, as it seems to have already addressed some of the scalability issues.
What though of the characteristics that are unique to Litecoin, how might they impact its price prediction?
Inevitably a growth in people using Litecoin could generate a surge in its price. As we mentioned previously Litecoin is faster and cheaper than Bitcoin which has made it popular with users of the dark web. Indeed an estimated 30 per cent of all transactions on the dark web are processed through Litecoin. Should transactions made via the dark web continue to grow so too might the use of Litecoin.
Key Litecoin issues
Litecoin is also popular in China, so it is especially vulnerable to any legislation which might impact its use in that country. If however cryptocurrency regulations in the country are liberalised, Litecoin could benefit enormously.
Litecoin has also proved to be highly durable and has not been as affected by bear markets as much as some of its rivals. Furthermore, many commentators believe that its technology is stable and reliable and that its founder is a highly credible individual.
On the downside there is the issue of how the coin might develop from a technological perspective. It is overseen by the Litecoin Foundation but as of late 2019 there was degree of speculation as to how much innovation was going to take place in the near future. Put baldly, Litecoin could fall behind some of its rivals as they tweak and improve their protocols.
So will Litecoin go up? Overall it appears likely that Litecoin will rise over the coming months spurred on by Bitcoin price rises and a degree of optimism about its own future.
The key question is how much. Cryptoground is positive about the future of the coin. It assumes that Litecoin will reach $136.52 in one year and in five years could be as high as $398.72.
CryptoInfobase’s Litecoin price prediction is that it will undertake two major price jumps, one in 2020 and a second in 2025. It will finish 2020 at $320 and by 2025 it will have a price of $950.
A more modest rise is predicted by DigitalCoinPrice, which has the coin on $103.444 by the end of 2020.
Overall the future for Litecoin looks promising, the big question is how promising?
FURTHER READING: Bitcoin halving
FURTHER READING: Bitcoin price prediction 2020