Factors That Affect Litecoin Price and Where Is It Headed?

The market cap for Litecoin is about $7.11 billion as of 2021. While we are not aware of the maximum supply, the current circulating supply is about $66.75 million. Litecoin (LTC) joined the crypto industry in 2011, two years after Bitcoin.

Litecoin founder, Charlie Lee, wanted to develop a better version of Bitcoin. That’s why some investors refer to it as the “lite version of Bitcoin.” While Litecoin has nearly similar features as Bitcoin, it offers faster transaction feeds, thanks to many miners in the blockchain.

Will Litecoin price increase in 2021? Litecoin’s value started shooting dramatically in January 2019. Sometimes, it even dominated Bitcoin during sustained trading volume. Although LTC regularly appears on the top 10 crypto coins, the media doesn’t offer much Litecoin news.

This explains why investors are scrambling to understand Litecoin’s value and whether it will shoot in the future. Various Litecoin predictions suggest that the coin will likely offer an excellent alternative for Bitcoin.

So, what are the prospects of Litecoin in 2021 and beyond? This article looks into the top factors affecting the price of Litecoin. We’ll also give Litecoin price predictions on where it’s headed in the future.

1. Faster Transactions

Any consumer option for digital currency goes for an option guaranteeing faster transaction speeds. Generally, consumers want to pay faster and proceed with other activities. Whether they pay in cash, credit cards, or crypto, they want to do it in a flash.

Nearly all cryptocurrencies, including LTC, support one block addition every 2.5 minutes. That means you may have to wait for a while before a seller validates your payment. However, LTC has a pretty fascinating solution to increase its transaction speeds.

Litecoin is working on a layer-2 blockchain solution from Lighting Network. This platform allows users to add multiple protocols to a blockchain without interfering with its activity. It will allow the blockchain to process faster transactions in a matter of seconds.

Increased transaction speeds in a popular medium, such as Litecoin, enhance its utility. It will likely be popular in all stores that accept crypto payments. Today, Litecoin is among the leading modes of crypto payment accepted in the US.

2. Lower Fees

The main factor that triggered worldwide peer-to-peer digital cash is lower transaction fees. Small businesses often brace losses due to high transaction fees charged by traditional financial institutions. Even worse, some players charge a percentage of the money transacted.

Litecoin is a go-to option for many merchants who want to avoid hefty transaction fees. Even better, its fee keeps on decreasing with time. This will likely increase its value as many people adopt its utility.

It’s imperative to note that Litecoin offered lower transaction fees right from its creation. It has a reputation for handling the biggest transactions at negligible fees. For instance, in November 2018, Litecoin made headlines by transacting $62 million for $0.50.

3. Stable Litecoin Price

Expert Litecoin predictions suggest the coin may retain a relatively stable value in the coming years. This is due to the reduced rate of new LTC supply.

As noted, the developer didn’t reveal the intended maximum supply at the launch. Similarly, no Litecoin news offers that information.

How does the Litecoin value increase to decreased supply? The theory of supply and demand supports the value increase prediction. When you decrease the supply of an asset and other market conditions remain perfect, its value likely increases.

Litecoin developers reduce its supply through halving events. Halving events entails cutting a blockchain into halves until the founder achieves the intended maximum circulation. Nearly all cryptocurrency developers use this technique to decrease their supplies.

For LTC, halving events will happen until it the number in circulation reaches at least 84,000,000. Although halving events in LTC are not common, they help track its supply. This ensures Litecoin price doesn’t fall unreasonably.

4. Private Transactions

Litecoin’s developer, Charlie Lee, believes in the privacy and fungibility of cryptocurrencies. That’s why he decided to create LTC.

According to him, LTC guarantees more privacy through confidential transactions. However, this feature is still in the pilot stages and inaccessible.
 Guaranteeing confidential transactions is quite a long shot at the moment.

For instance, South Korea delisted some coins because of anonymous transactions. Thus, the subject remains quite controversial across the globe, including the US.

So, how do the “promise of private” transactions affect Litecoin’s value? At the beginning of 2019, Litecoin announced its intentions to use the Mimblewimble protocol for confidential transactions. Amid market volatility, LTC’s price rose due to this news.

Although it’s not clear how confidential transactions will disrupt Fintech, consumers want to experience it. So, privacy is a big factor in determining a coin’s price.

Litecoin Price Prediction

Litecoin closed the 2020 end of the financial year at 124.69. At this time, its price had hit an all-time high increase of more than 140%. From the start of the year up to about the end of the second quarter, the price of Litecoin rose by about 211%.

This rise made the coin hit an all-time high of $400! However, the price drastically dropped by 63% throughout May. Just like Bitcoin, Litecoin also experiences huge falls. While most people may see this as a loss, prudent investors take advantage of the dip to buy more coins.

So, what’s the long-term Litecoin price prediction? Generally, there is a big potential for this coin. Litecoin value may go high in the coming years. Experts say LTC may start showing small but positive impacts from July onwards.

Invest Wisely in Litecoin

Litecoin is not only among the popular but also the oldest cryptocurrencies in the market. Litecoin price consistently ranks in the top 15 cryptocurrencies. This makes it a relatively stable crypto compared to other altcoins developed in the last decade.

On top of that, the proponents discussed above suggest a hopeful increase in Litecoin adoption. Thus, its usage will likely expand on a grander scale. Compared to Bitcoin, Litecoin’s percentage growth rate is higher and more promising.

Check other pages on this website for more Litecoin news and future predictions.