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Two Critical Factors Driving and Sustaining Litecoin

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Over the last two weeks, Litecoin (LTC) had increased its market cap from $3.6 Billion to $4.9 Billion. Its price rising by almost $30 to $90.85. Up by 111% since September, its YTD rise--an astounding 1,488%--dwarfs Bitcoin, yet it remains fairly obscure outside the crypto-cultural sphere.

LTC, whose technological attributes make it something of a Bitcoin clone, is often perceived as the silver to Bitcoins gold. Besides its price being significantly lower, LTC has four times Bitcoins coin supply with a block time that also is four times the speed of Bitcoin (2.5 minutes). Ultimately, LTCs expansive supply and block time allows for quicker and more frequent transactions on a daily basis--a critical aspect of its utility that makes it a potentially undervalued digital currency/asset.

That hashrate and difficulty has continued to increase suggests that LTC mining has sustained itself despite the rise of more popular (and more profitable) cryptocurrencies. This indicates that LTC accumulation may have grown in the shadows of popular speculation but in the clear light of fundamental interests toward its utility. Its block reward is expected to halve in 2019, from 25 to 12.5.

Like Bitcoin, LTC is currently has pseudonymity and not anonymity. But Charlie Lee, LTCs creator, says that a Confidential Transactions feature--which should make LTC fully anonymous--will soon be implemented when it is ready. Lee and his team are also working to improve LTCs fungibility, which is a critical feature of a well-functioning currency.

In conclusion, its important to note LTCs potential for utility, and the fact that its mining support steadily increased in the context of relative obscurity. One would have to consider the motivations behind the efforts that have driven its market cap from $212 million to $4.9 billion in the course of a year despite its lack of mass popularity among the speculative crowd.

Support and Resistance: LTC is currently testing Resistance in the $90 range with support around the $50.

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About the author

Karl Montevirgen a content creator and market strategist for Halifax America LLC. Formerly the Head of FX Operations at Global Futures Exchange and Trading Company, Karl has been involved in the commodities and FX markets for the last 9 years He has published with Finance Magnates, Technical Analysis for Stocks and Commodities, The Content Wrangler, and numerous other blog sites.

You can view his extended profile, list of publications, and theoretical content work on his LinkedIn page. 

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