While most of the cryptocurrency market hit the snooze button on Monday, Litecoin traders were up and about. More than $408.0 million worth of LTC coins changed hands as the Litecoin to USD exchange rate jumped roughly 4.11%.
Litecoin also gained around 2.9% against Bitcoin, possibly balancing for the different speeds in their recoveries. Nevertheless, it’ll be a long time before the two currencies are disentangled.
To this day, investors perceive Litecoin as “the silver to Bitcoin’s gold.”
There were moments when the market started to value LTC based on Litecoin news alone (which led to all-time highs), but then China rained on everyone’s parade by shutting down yuan-to-cryptocurrency exchanges.
That type of regulatory strong-arming sets the industry back a long way. Investors who aren’t well-versed in the economic theory underpinning cryptocurrencies become terrified of losing their investment. So they sell, en masse.
Nevertheless, LTC is on its way back toward our $200.00 Litecoin price forecast.
The largest amount of trading activity came from a Korean exchange called Bithumb. It accounted for nearly one-fifth of all LTC trading volume on Monday, helping to offset the slowdown in yuan to Litecoin trading.
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I should note that LTC/CNY trading didn’t fall off a cliff in the way many assume it would. Huobi and OKCoin still account for 10.35% and 16.95% of LTC trading volume, respectively.
I have a pet theory explaining why yuan to Litecoin trading is still robust.
The Chinese government forced Huobi and OKCoin to stop taking yuan deposits immediately. However, the exchanges have until the end of October to shutter yuan to Litecoin trading.
You know what that means, right? Any yuan already in Chinese trading accounts can be used to buy cryptocurrencies.
It’s like if you filled a pail of water and used it to water your lawn. Firstly, you should have a garden hose. Secondly, if a municipal officer showed up halfway through to switch off the tap, you’d still have water in the bucket.
Likewise, China turned off the spigot for yuan to Litecoin, but didn’t drain the bucket of yuan that is committed to the crypto market. That’s why our Litecoin price forecast still stands.