Litecoin News Update
After hitting a little speed bump, the Litecoin price is once again revving up. Significant demand is flowing in from South Korea, where new regulations are about to change the way Koreans trade cryptocurrencies. But for Litecoin, this may be good news.
South Korea is mulling over imposing stricter regulations for trading digital currencies. Part of the framework could look something like this:
- Traders may have to verify their identity via their bank accounts.
- Duplicative trading accounts will not be allowed.
- Minors will not be allowed to trade cryptos.
- Koreans may have to pay capital gains taxes on their cryptocurrency investments.
Alright, that hardly reads like good news on a cursory look, but try reading between the lines.
Regulations mean less volatility in prices, which in turn means more chances of Litecoin becoming a digital currency most-suited for daily trades.
That’s exactly what Litecoin founder Charlie Lee was getting at in his interview with CNBC, when he said, “I think increased regulation will help to reduce the volatility of the coin.”
He reminded, “There is a lot of frenzy in (South) Korea right now and I think that’s driving up the price.” (Source: “Litecoin founder Lee predicts future for bitcoin and his own runaway cryptocurrency,” CNBC, December 15, 2017.)
Are you confused? Let me explain.
Let’s say you’re buying something with Litecoin today. Say, you pay 3 LTC for an “iPhone” only to find out tomorrow that you overpaid. Litecoin prices shoot up 50% overnight and now you could buy the same iPhone for only 2 LTC.
This is the predicament currently haunting the Bitcoiners, which is why Bitcoin’s utility as a daily medium of exchange is now in question.
Bitcoin is taking the backseat as it becomes more of a store of value, like gold. Litecoin, on the contrary, is striving to become the alternative monetary unit to fiat-currency. And for that, it must preserve its value, at least in the short term.
This is exactly why Lee says he would be happy to see Litecoin at $300.00 by end of next year.
Take note that the two biggest South Korean exchanges Bithumb and OKEx have been, on average, contributing to about a third of Litecoin’s total daily volume. Litecoin’s massive buyer-base is concentrated in South Korea, but the majority of it is adding to its volatility.
Regulations would help rein in the frenzy, put a cap on speculative trades, and let stability flow back into prices.
A regulated Korean cryptocurrency market would, in addition, attract more mature investors who may willingly ascribe to Lee’s “buy and hold” mantra, instead of engaging in a dangerous, speculative bidding war.
What’s Happening with Litecoin Prices Today?
Litecoin prices retraced their steps back above $300.00 over the weekend. At the time of writing, the average LTC to USD rate was $320.10. The volume is trailing last week’s $2.0 billion average, but still holding strong over $1.25 billion in the past 24 hours.
Daily Litecoin Price Chart
Chart courtesy of TradingView.com
Litecoin trades on American exchange GDAX—for pairs LTC/USD and LTC/BTC—have jointly accounted for about 22% of all trades in the last 24 hours. South Korean exchanges Bithumb and OKEx have trailed GDAX with a combined 20% of all trade volume.
Our Litecoin price forecast is firm with an LTC price target of $400.00 for 2018.