Can Litecoin Become A Bitcoin Challenger In 2021?

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Last Updated on 27 December 2020 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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With Ripple Labs suffering because of the threat of the SEC lawsuit that could see it outlawed on US platforms and leave its board with heavy fines. Other contenders are vying to become more important and grab a piece of the possible market share that the demise of XRP could leave. If we look at the performance over the past week (and certainly over the past month), Litecoin could indeed become such a challenger.

Trading well above $100 at the time of writing, Litecoin is the best performing coin over the past week out of CoinMarketCap’s top 10, and thus the only one (together with Bitcoin of course) that seems to gain from the market share lost by XRP since the SEC suit.

There are a few reasons we can come up with for Litecoin’s rise in recent weeks and months. Let sum them up.

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Paypal and Grayscale

When PayPal announced that it would allow it’s 300 or so million users to buy crypto via its site next year, the Silicon Valley company limited the number of coins to a few. The expected Bitcoin and Ethereum were indeed there, while Litecoin was a surprise.

Even investment fund Grayscale, which as an early crypto believer that has some $16 billion in assets under management by now, has started buying up ever larger swats of Litecoin since.

Over the summer already, they explained that:

Litecoin has evolved to complement Bitcoin as a comparable alternative digital currency and payment method with fast confirmations and low fees.

Possible cooperation with Cardano

Others in the cryptosphere are also firm believers in Litecoin, which doesn’t seem to have qualms with anyone. The most heard voices, such as Anthony Pompliano, Vitalik Buterin, Changpeng Zhao or Charles Hoskinson have never said a bad word about the platform. In fact, in the past year, Cardano founder Hoskinson has even hinted at a possible cooperation with Litecoin.

Charlie’s Lindy Effect

Lastly is the importance of the calm demeanor of founder Charlie Lee, who refers to himself as Satoshi Lite.

He is not the frequent Tweeter that others are in the cryptosphere, but his recent explanation as to why Litecoin is up in recent weeks was perfect and to the point.

Charlie claimed that Litecoin benefited from the trust of both Grayscale and PayPal, but also mentioned how his coin is already 9 years old, and has never known any downtime.

Analysts call this the Lindy effect, meaning that the coin is more trusted because it has never run into problems. It may seem that Litecoin is not as exciting as anything new on the block, but after 9 years of proving its worth, it is a coin you can trust.

If institutions indeed continue their investment into crypto next year, expect them to put at least part of their money in Litecoin because of this.