Today is a good day for Litecoin news.
It seems the civil war between Bitcoin and Bitcoin Cash is finally wearing thin, as BTC prices are rebounding quite strongly against the U.S. dollar. Also, you can tell that frustrations are running high just by reading the relevant forums.
On Reddit, for instance, one user posted that “the bitcoin drama has made one thing abundantly clear to me: I should be buying more Litecoin.”
The comment right beneath that read: “Mom and Dad are fighting again so I want to stay the weekend with Uncle Litecoin.” (Source: “Who else is here because of the crap going on with BTC and BCH?,” Reddit, November 14, 2017.)
It’s easy to dismiss these comments as normal Internet behavior, but they are being met by action as well.
The Litecoin to USD exchange rate rose from $61.45 to $64.96 in the last 24 hours, an increase of 5.72%. At the same time, the Litecoin to Bitcoin rate inched up 0.14% to 0.00938825 BTC.
This bullish momentum is made even more remarkable by the fact that it happened in the absence of strong trading volumes. Investors usually swap between $250.0 million and $400.0 million worth of LTC tokens each day, but now trading activity has slipped below $200.0 million.
Despite this shrinking liquidity, LTC was able to find strong bids.
Daily Litecoin Chart
For those who are a little lost, let me add some context.
Investors had been fleeing from Bitcoin to Bitcoin Cash in the last few days. Why? Because they thought it would soon be recognized as the “core” Bitcoin. Yes, but why did they think that?
Well, this is where it gets interesting.
There was a letter written by a known Bitcoin enemy claiming that BCH has more credibility than Bitcoin and that it could dethrone BTC in six months. This claim was somewhat backed up by Vitalik Buterin, the wunderkind behind Ethereum’s blockchain. (Source: “Bitcoin Classic Closing its doors,” Bitcoin Classic, last accessed November 15, 2017.)
However, they forgot about human psychology and path dependency.
It certainly matters that CME Group Inc (NASDAQ:CME) is adding a Bitcoin—not Bitcoin Cash—futures contract to its giant derivatives market. Hedge funds have committed to holding a non-trivial portion of Bitcoin—not Bitcoin Cash—in part of their portfolio. The credibility of CME approval is actually making Wall Street take cryptocurrencies seriously.
We believe this expansion of crypto market cap could lead LTC back to $90.00 and then towards our $200.00 Litecoin price forecast. However, we are a little concerned that falling liquidity could impact that progress. We will continue to monitor the situation.