Daily Litecoin News Update
At least two incidents yesterday have sent Litecoin prices tanking below $200.00. Both involved cryptocurrency exchanges, not cryptocurrencies directly. It’s fair to say that fear, uncertainty, and doubt (FUD) was once again pulling the strings on investor sentiment.
First, one of the world’s largest cryptocurrency exchanges, Binance, got infiltrated by hackers on Wednesday. While the attack didn’t do much damage, the fear was enough to force a massive sell-off.
What’s alarming, however, is that the Litecoin dumping primarily occurred on U.S. exchange GDAX and South Korean exchange OKEx, neither of which was affected by the hack.
The incident is a testament to the fickle nature of crypto investors. Binance later confirmed that all investor money on its exchange was safe. Those who lost any coins were fully compensated. All trading activity was restored within hours.
Unlike most hacks, this one should have been regarded as merely a glitch that was corrected before it could do any actual harm to investors. And yet, somehow, it managed to wreak havoc on crypto prices.
Topping this off later on Wednesday was a statement from the U.S. Securities and Exchange Commission (SEC) in which the regulatory agency demanded that all cryptocurrency exchanges that sell securities to register with it.
Mind you, the SEC defines cryptocurrencies issued through initial coin offerings (ICOs) as securities. But cryptocurrencies like Litecoin and Bitcoin, which did not come into being through ICOs, are defined as “commodities,” not securities.
Since the largest U.S. crypto exchange, Coinbase, and its trading arm, GDAX, only list four “commodity” cryptocurrencies—Litecoin, Bitcoin, Ethereum, and Bitcoin Cash—the SEC’s registration requirement would not apply to it.
The rule would most likely apply to smaller exchanges listing ICO cryptos and foreign exchanges working in the United States. But since Coinbase is the most dominant exchange in the U.S., this regulatory announcement should have had little to no effect on prices. Even if the regulation does affect trading in ICO cryptos, it certainly didn’t warrant an off-loading of Litecoin.
As of this writing, the LTC to USD rate was down about 3.56% in the trailing 24 hours. But what’s reassuring is that the LTC to BTC rate was up 2.48%. It confirms the theory that this correction had little to do with Litecoin and more to do with market forces radiating from Bitcoin.
Chart courtesy of TradingView.com
It’s glaringly obvious that Wednesday’s crash does not, in any way, affect Litecoin’s fundamentals. We expect the prices to recover once the market comes to its senses. So, there’s no reason for us to alter our Litecoin price prediction for 2018. Our LTC price target stays put at $400.00.