Supporters of litecoin usually tout the sixth-largest cryptocurrency as “silver to bitcoin’s digital gold,” however one cryptocurrency says it’s additionally a diamond within the tough.
Writing in an eight-page report printed on Tuesday, eToro senior market analyst Mati Greenspan argues that the litecoin price is buying and selling at a “massive discount to what it should be worth.”
Greenspan bases this evaluation and a number of other technical and basic components.
On the technical aspect, he notes the significance of Litecoin, a Proof-of-Work (PoW) blockchain, being the dominant coin mined utilizing the scrypt algorithm. As lengthy as this stays the case, Litecoin will stay highly-resistant to 51 percent attacks since there’s not sufficient surplus hashpower to mount an assault on its community.
He additionally lauds Litecoin’s builders for structuring the cryptocurrency as a complement to Bitcoin quite than a competitor, enabling LTC to tether itself to the flagship cryptocurrency by adopting improvements equivalent to Segregated Witness (SegWit) and the Lightning Network (LN).
Adoption and different Fundamentals
Greenspan additional argues that litecoin has achieved extra widespread adoption than a lot of its friends with comparable or higher valuations. LTC, as an illustration, has greater than double the each day lively addresses (DAU) of bitcoin money (BCH), the fourth-largest cryptocurrency with a market cap roughly thrice the dimensions of litecoin’s valuation.
In reality, litecoin’s market cap to DAU ratio is among the many lowest within the large-cap cryptocurrency index, suggesting that the litecoin value is discounted relative to the coin’s current degree of adoption.
Recent bulletins, such because the Litecoin Foundation’s buy of a 9.9 % stake in German monetary establishment WEG Bank, may additional bolster LTC’s fee of adoption.
Noting that the current bear market has pushed down cryptocurrency costs in comparatively indiscriminate measures, Greenspan speculates that litecoin as a person asset was oversold relative to its fundamentals. That’s significantly true for the reason that litecoin value has fallen roughly 81 % from its all-time excessive, outpacing the 71 % hit taken by the market as a complete.
“Given that Litecoin has an established and stable working product, as well as significant adoption, this bear market of the whole cryptocurrency industry could have lead to Litecoin being oversold,” he concludes.
Featured picture from Shutterstock. Charts from TradingView.
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