Litecoin News Update
Remember when hackers broke into the Mt. Gox exchange? That security breach—which took place several years ago and resulted in the loss of billions in Bitcoin—continues to roil cryptocurrency markets to this day.
In order to understand the story, you have to know the history.
So let’s start with what happened after Mt. Gox was hacked. To begin with, investors were compensated for their loss in fiat currency. Yen instead of Bitcoin, as it were. But then some of the missing Bitcoin were recovered. Over time, they grew much, much more valuable.
In fact, it got to the point where Mt. Gox was sitting on a mountain of Bitcoin. A trustee was put in charge, who, at some point, started selling Bitcoin by the boatload, earning himself the title “Tokyo Whale.”
In relatively short order, the Tokyo Whale sold $400.0 million worth of Bitcoin.
The intention was to liquidate assets in order to pay off creditors. However, an unintended side effect was that cryptocurrency prices got depressed, including Litecoin prices.
Then, in March, reports surfaced saying the Tokyo Whale would remain inactive till September. This was initially taken as a bullish sign. Pretty soon, however, investors realized that digital assets would take a beating in September. So they sold off Bitcoin, Ethereum, Litecoin—anything that wasn’t bolted to the ground, really—in anticipation of the sell-off.
That’s where we are today: A market in chaos because of something that happened years ago.
However, there’s a silver lining to consider. For one thing, the CEO of Mt. Gox might find a way to redistribute the 160,000 remaining tokens to investors. If that happens, we may not see the calamitous sell-off everyone expected. But more importantly, the silver lining is that LTC prices are not falling because of anything to do with Litecoin. Everything is Bitcoin and Mt. Gox related.
The market is treating cryptocurrencies as a single asset class with a shared fate. While this may be true from a regulatory standpoint, it certainly is not true in relation to Mt. Gox.
There is plenty of uncertainty in the cryptocurrency market, so it’s better not to invent any. The Mt. Gox drama is relevant to long-term LTC prices. As such, we leave our $400.00 Litecoin price forecast untouched.