Before we provide analysis on this odd bit of Litecoin news, it seems useful to provide a backstory for our new readers. Otherwise, the question sounds bizarre.
Imagine, if you will, that all the Bitcoin miners, developers, investors, and entrepreneurs are gathered in one room. You have a proposal to upgrade Bitcoin—to make it faster, more efficient, more scalable—and you put it to a vote.
What you need is an “economic majority” to approve your proposal. People argue about the percentage number that constitutes an economic majority, but it’s safe to say that you want overwhelming support.
However, your proposal doesn’t go down well. It only gets a handful of votes, leaving you in a sticky situation. Do you: A) Take the loss quietly and move on, or B) Go to the room next door and plot your revenge?
We’re living through Option B.
When a bunch of Bitcoin developers disagreed with the direction the currency was going in, they formed Bitcoin Cash by splitting the blockchain. This happened at the start of August. Now they are claiming that BCH will replace BTC as the main “Bitcoin.”
People might have ignored that claim, except that Bitcoin was just coming off of the heels of another fork. BTC had also just finished a rally that lifted its price from $3,000 in the middle of September to a high of $7,850.
It was stretched too thin, in other words, to fend off an attack from Bitcoin Cash. This led to a massive rotation from BTC to BCH. Bitcoin Cash’s price soared 79.67% this week alone.
However, it wasn’t the only one to benefit. Investors scared of keeping their money in BTC turned to several other protocols, including Litecoin and Dash. LTC prices are up 12.95% as a result, leading the Litecoin to USD exchange rate to $62.40.
Daily Litecoin Chart
Litecoin was lucky to catch this tailwind, but it is likely a temporary one. Bitcoin is still Bitcoin, regardless of what a few mutinous developers may claim.
It’s not like the CME Group Inc (NASDAQ: CME)—which is adding Bitcoin futures to its derivatives market—will suddenly swap BTC for BCH. They want the original blockchain and, in time, so will investors.
That said, we are hoping this upward thrust will spark a rally in LTC prices, as it currently remains well below our $200.00 Litecoin price forecast for 2018.