Will Litecoin Price Overtake Bitcoin?

Introduction

Over the past several years, cryptos have gained more attention with wider adoption. Moreover, the growing popularity has also attracted large institutions of letting. Bitcoin is the very first crypto on the market, and Litecoin is the very first fork of it. Litecoin is also called a lighter version of Bitcoin, as it shares similar features as 

Bitcoin has a different consensus algorithm. Bitcoin uses the SHA-256 hash function, while Litecoin uses Scrypt, which has much higher memory requirements for PoW. Although Scrypt decreases the dependency on GPU Arithematic Logic Units (ALU) and ASIC machines, SHA-256’s process time is much shorter. 

Besides, there is a huge difference in their market capitalization, even though they began their trading journey almost at the same time. In terms of being more scarce, Bitcoin’s maximum supply is capped at 21 million, while Litecoin can have as much as 84 million LTC. Another key difference is the processing time. Where BTC requires nearly 9 to 10 minutes, LTC accomplishes the task in 2.5 minutes.

Price Performance of LTC & BTC

Bitcoin was the very first crypto to gain mainstream attention and adoption. The rise of Bitcoin led to the birth of many other cryptos, Litecoin being one of them. BTC’s price has been on a run since the day of its inception, displaying healthy price variations since then, with highs close to $69,000 and lows below $16,000 in just 15 months. On the other hand, Litecoin has maintained a low-key trend despite being the first altcoin in action until now. However, with the advancements in the network and the inclusion of multiple upgrades, LTC prices may undergo a significant upswing soon. 

The BTC price has been lingering around $30K for quite some time and failing to rise above the resistance at $31,000. The extended compression is believed to create huge pressure, which may result in a breakout, while the direction could depend on the volume. However, the technicals and the on-chain indicators are in bullish favor, which suggests a massive breakout may be fast approaching. This may lead the price to close the yearly trade close to $35,000. 

Secondly, the Litecoin price has been displaying acute bullish momentum ever since the rounds of halving gained momentum. The price is in the middle of the pre-halving run, which may rise again as the retracement phase appears to be at an end. Therefore, after the halving, the LTC price could start a fine upswing and reach beyond $170 to $180 by the end of the year 2023.

Read More: Litecoin Price Prediction

Factors Affecting the Price of Cryptos

Multiple factors may impact the value of the cryptos; demand and supply is the most important among them. As it’s known to many, the price of a token is largely determined by the demand for that token against its supply. If the supply decreases and demand increases, the price tends to rise and vice versa. 

Secondly, crypto adoption is another important factor that builds confidence within the investor, who may remain bullish on the crypto space in the long term. Recently, industry giant BlackRock and others filed a spot Bitcoin ETF. The crypto space, which was under extreme selling pressure, quickly rebounded and has been maintaining a decent upswing till now. 

The regulatory surveillance also positively or negatively impacts the cryptos’ value. The markets thrive when the rounds of adoption by any country or positive regulation surfaces. Besides, a crackdown, scrutiny, or an outright ban may induce FUD among the investors which may drop the price hard. 

Read On: How Often does BTC Price Fluctuates

Litecoin Halving vs Bitcoin Halving

Halving is an event where the miner’s rewards are halved for the platforms working on the Proof-of-Work consensus mechanism. This is done once every 4 years to reduce the inflation pressure over the crypto in the long term. While the mechanism is more or less the same in both cases, there are a couple of variations between Bitcoin halving and Litecoin halving.

• Litecoin halving’s impact on the LTC price doesn’t have the same impact as Bitcoin’s halving has on the BTC price.
• Litecoin halving trails by 3 years from Bitcoin halving. The upcoming event is the 3rd Litecoin halving event, while Bitcoin’s 4th halving is to happen in March/April 2024.
• Both Litecoin and Bitcoin operate on different levels of scarcity. While Litecoin’s supply is fixed at 84 million, Bitcoin’s total supply is capped at 21 million, making it more scarce than Litecoin.
• As the supply of LTC is more, miners may get higher volumes to access compared to that of BTC.

Litecoin’s Advantages and Potential 

1. Litecoin has one of the strongest network effects with high liquidity as it is listed on every exchange in the world. 
2. The token is the leader in brand recognition due to the mainstream media coverage and a long track record since 2011
3. Without any technical layers added above the Litecoin network, it is faster than Bitcoin, with lower transaction fees. 
4. Litecoin has strong community support and actively works to improve and develop the platform.
5. The token is widely accepted by major payment processors such as Coinbase, BitPay, and Aliant Payment System as a form of payment.

Bitcoin’s Dominance and Challenges

The dominance is the ratio between the market capitalization of Bitcoin to the market capitalization of the entire crypto market.  The trend and the direction of the entire market cap follow the Bitcoin market cap closely as it is the very first and largest recognized crypto. Hence traders usually refer to Bitcoin first before analyzing the entire market. 

Some factors influence Bitcoin’s dominance, like the BTC price variation, altcoin’s price fluctuation, increased use of stablecoins, and, more important, market conditions. In 2015, Bitcoin shared a huge dominance of over 80%, slashing hard to 40%. This was mainly due to the influx of new altcoins in the market, which dropped the BTC dominance to a large extent. 

Market Analysis

Crypto market sentiments have flipped largely since the beginning of the year and hence are believed to remain under bullish influence for a long time ahead. Although most of the tokens are chopping around narrow regions at the moment, they may tend to undergo a breakout at the earliest due to excessive compression. Therefore, the Bitcoin price and Litecoin price are both expected to maintain a notable upswing ahead.                                                                                                                         

Conclusion

The Litecoin halving is fast approaching, and the markets continue to remain sluggish. The LTC price also remains under a bearish influence. Therefore, the halving is expected to ease the token from the bearish pressure, but until the BTC price does not change its trend, the markets may continue to consolidate.

Know More: How to Buy Litecoin in India

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