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  • Writer's pictureAldo

Why my high conviction bet for this decade is Litecoin




My high conviction bet for this decade is Litecoin. The more I look around and see grossly mal-informed comments regarding it, in combination with the research I’ve put in, has made me even more wildly bullish. Why am I so optimistic about Litecoin? Let’s take a look at the current state of the degen crypto space.


To begin, I won’t bore you about the history of Litecoin because most people already know it’s one of the OG cryptocurrencies in the space and the oldest (and still persisting) coin after Bitcoin. Some of the newer people in crypto refer to these older coins as “dinosaur” coins. I refer to them as still being incredibly alive compared to pretty much every other coin that has withered away to the depths of the abyss, facing a slow and cruel death.


“Wait, Litecoin is still a thing?”. I hear this often. Yes, it is. And surprisingly, practically every user metric on it has gone UP over the years, but its price hasn’t followed as closely. Hmm, a widening gap between activity on the network and price? People within the Litecoin circle know about this, but many outside of it do not.


The newbs (and unfortunately, some old timers) in the space will only see price action and think “lol, s**tcoin”. However, the true analysts are looking a bit deeper and searching for hidden opportunity. But, what exactly is that opportunity?


As we all know, Bitcoin is the king. It’s the most recognized name in the game. It’s the bee’s knees. However, the network is wildly saturated. Years ago, the Bitcoin community decided to keep Bitcoin’s block size relatively small in the attempt to make users compete amongst one other—a fee market. If you pay more, your transaction gets placed in a block faster. Many predicted that fees would rise over time, but most did not know ‘just’ how fast this would happen. Did the organizers of Woodstock festival know how bats**t crazy things were going to get? Maybe a little, but oh boy, when it happened, they weren’t ready.


Last year, Bitcoin had a black swan event occur—the creation of the ordinals protocol. No, ordinals aren’t just a fad and if you think they are, you have to look more closely. This is coming from someone who was previously a huge NFT skeptic. Try deeply diving into an ordinals community for a few months and you will see how die-hard these users are.

A lot of new development is coming from this space and I’d argue there’s more building happening within ordinals than there is within other bitcoin-related sectors. In fact, developers are coming into the Nakamoto standard coins (BTC/LTC/Doge) from chains that became greatly popularized because of NFT’s (e.g. Ethereum). There’s an active migration of developers occurring from the ‘DeFi’ space back to OG coins. Put simply, during the time I’ve been in this space, I have never seen as much active development on Litecoin as I have today.


I won’t dive into ordinals much, but all you have to know is that a method was discovered for inscribing actual data onto the blockchain forever. Pictures, videos, titles, etc. it might not be for you, but a lot of people are into it. To inscribe data into the blockchain, you must pay fees.


So, imagine that things were (kind of) fine and dandy in the bitcoin space, people minding their own business and somewhat expensively sending bitcoin to one another. Bitcoin, being the OG and the most famous crypto, was already attempting to handle the high load. But then all of a sudden, this guy shows up and says “hey, we can do more stuff on Bitcoin, and yes, you have to also pay to do it!”. Well, to say the least, Bitcoin fees skyrocketed when ordinals launched, making transactions extremely expensive.


This is one factor. But also, ordinals taught developers that there’s more ways to play around with bitcoin. “Ordinals is one way of doing it, but what if there’s other ways?” And naturally, what are developers best at doing? Building and experimenting. Other standards have been created and this year, the Runes protocol was released, which has caused an additional skyrocketing effect on Bitcoin fees as well.


Ordinals and LTC-20 has also been built out for Litecoin, however, there’s one significant difference between the two. Litecoin’s blockchain has much more space than Bitcoin’s. Fees are much more affordable (fractions of cents) due to Litecoin handling the load more efficiently. Not to mention, Litecoin already has extension blocks integrated which helps with scaling.


On the other hand, Bitcoin does not have extension blocks. The most famous scaling solution for Bitcoin, the Lightning Network, has currently failed to live up to expectations after over 5 years of having launched, creating an aura of pessimism amongst the community.


The craziest aspect, in my opinion, about the increasing fee market situation is that we’re not even at the heights of a bull market yet. When we get there, Bitcoin will become increasingly difficult to deal with. I often send Bitcoin back and forth between wallets and have to give myself pep talks before doing so from how unlikeable the process is. Or perhaps, I became spoiled from using Litecoin.

If the Bitcoin network becomes practically unusable for people simply trying to transact, what‘s the closest alternative?


That would be Litecoin, which is often coined the ‘silver to Bitcoin’s gold’.


It’s the one you often see on a CNBC or Fox Business ticker right next to Bitcoin on the TV screen. Hmm. Perhaps big money, TradFi folks are more interested in steadier and longer term cryptos than random pump and dumps that may take the spotlight for a year or two before bleeding out. LTC is supposed to stand for “long term crypto” anyways, right?

In regards to the earlier comment I made about newer people in the space referring to older coins as being ‘dinosaur coins’, here’s what older TradFi wealth thinks.


Dinosaur is good. Dinosaur means time-tested. Dinosaur means you won’t get suddenly rugged by some rich VC that owns epic tons of the supply (which is the norm nowadays with newer coins). Dinosaur means the supply is more distributed and quite possibly that heavier initial holders have already exited, such as creators divesting and separating themselves financially. This isn’t the case for many of the newer cryptos whose teams are still holding onto a large % of the supply and still have that pending dump in the works. Not to mention, these newer coins are much more illiquid in comparison.

Since it launched, Litecoin has simply worked. It has 100% uptime. It’s reliable and you can count on it to get a transaction through, unlike the Solana network which has faced frequent outages.


TradFi likes these older coins. And, who’s having a party with the large TradFi players? The SEC and the CFTC.


If you haven’t already noticed, major TradFi companies (e.g. PayPal, Robinhood) that have begun integrating crypto services only work with a select few cryptos, Litecoin being one of them. This is because the SEC has never declared it a security and the CFTC has already declared it a commodity on various occasions. Regulatory speaking, it’s been one of the safer cryptos in the United States.


Since Litecoin has historically followed Bitcoin in every endeavor due to their structural similarities (fair launch, similar code, similar operating fashion, etc.), it’s heavily speculated that Litecoin will be one of the next, if not, the next, cryptocurrency to be approved for an ETF. Don’t believe me? Check out Grayscale’s roadmap for the coins they offer and their plan of converting their products into ETF’s. While you’re at it, check how many Litecoins Grayscale has been buying lately. Also, tune in to comments such as Steve McClurg’s (Valkyrie Co-founder), in which he states that it’s possible a Litecoin ETF could be approved before an Ethereum one (per https://x.com/eleanorterrett/status/1772960281804615724?s=46&t=2-ZPeNrySy_7TiGDW31WUg)


“But, it has to be the Ethereum ETF that will be approved first, no!?” It’s unknown, but, there are strong rumors that the SEC is going to launch a battle against Ethereum, which operates in different fashion to Bitcoin and Litecoin. It’s highly speculated that Ethereum is a security and will face hurdles to obtain an ETF. It may take much longer than expected for

Ethereum to get its way.


In summary, we have a few factors to consider.

  1. Bitcoin fees are multiplying, which will lead to movement towards lower fee chains (LTC, the most similar crypto to Bitcoin).

  2. Litecoin user metrics continue to rise as price has mostly remained flat, within a tight range (very similar to what Dogecoin looked like before it broke out against Bitcoin). Did I mention Litecoin payments heavily outperformed Bitcoin payments on the worlds largest crypto payments professor, BitPay?

  3. A Litecoin ETF appears to be imminent, with major institutions already preparing for it.

  4. Litecoin development is at an all-time-high and is attracting developers from other communities.

  5. Litecoin’s recent extension block upgrade increased its scalability, fungibility and user data protection in preparation for the user influx that will occur.

  6. Best of all? It’s currently on the lower end of what it’s typically traded at in the past, sitting in historical accumulation territory.


I understand that this space can be noisy, and having been around for so long, Litecoin may have drifted out of the spotlight. However, I’m here to inform that Litecoin Chikun is very much alive and well and I am confident it’ll soon be unleashed from its cage.

Yorumlar


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