Is Litecoin overrated? Exploring its demand amidst price changes

Litecoin remains one of the first altcoins to be introduced worldwide in 2011. It was initially teased as an economical alternative to Bitcoin. It gained popularity only in 2021, when the token peaked at $417. However, things have been somewhat dismal for LTC, with the price slipping constantly in recent days. We must question if LTC’s valuation aligns with its current potential. Also, is LTC still in demand following the halving process since August 02, 2023.

The valuation of a digital token depends on its demand and supply. It is similar to a person wanting to buy a stock that is much in demand. What happens? The price increases with the demand, allowing some traders to sell their stocks and others to keep accumulating under the bullish sentiments. For crypto, this expands to the utility and availability of pool liquidity in addition to demand & supply. There are, therefore, arguments about how well the price of LTC justifies itself based on its demand.

Litecoin’s Historical Performance

August started optimistically for LTC, with the token reflecting a green $93.89 mark. It was assumed to be a sign of something historical about to come. It was in consideration of the upcoming halving process. However, the next two days saw LTC drop by a huge margin. The token touched $82.49 as of August 03, 2023. If that was not enough to hit a hard brick to the holders, LTC touched $64.78 by the middle of August. 

The performance is pretty credible compared to the value of $3.86 as of November 25, 2016. Come December 15, 2017, the token was riding high above the $300 mark. Exactly a year later, the holders were looking at a portfolio that had served them well for their short-term patience.

Recent Price Changes and Market Sentiments

Retail traders are investing in, or rather accumulating, the token. Most of them are reportedly buying the token in the range of 10 to 1,000 at the price prevailing during the purchase. It makes sense since LTC has been mostly considered an economical alternative to BTC.

Whales are unmoved by any of that and are instead shifting their focus to other tokens. Big investors have either fully or partially withdrawn their LTC holdings. The reason is unclear except for the assumption that the crypto winter is laying its cards against the odds.

A reason for the price could be the execution of the halving process. Another one could be limited utility or a larger focus on retail investors. Circling back to crypto winter, that has been playing against the community for some time now. When writing this feature, BTC and ETH have taken a hit to register the per token trading valuation of $25,968.50 and $1,641.68.

Litecoin Halving and Its Impact On Crypto Industry

Litecoin halving is a process wherein the reward given to miners for their role is lowered by 50%. It is a model that BTC follows. The role of a validator requires them to verify transactions and add blocks to the ledger. With rewards cut by half, speculation is that the price will increase. August 02, 2023, is when LTC halving happened, or at least a phase of it happened. The price has only tanked since then, with no tentative future scope.

Since it has been going through a winter session for the last couple of months already, there is an effect of Litecoin halving adoption in crypto industry. If anything, Litecoin halving has ensured that whales stay safe from the token to give retailers some space for accumulation. The effect on price post-Litecoin halving is tangible, with the token slipping to $64.88 when writing this article.

Assessing Demand and Adoption

LTC’s demand is majorly among retail investors. They have been seeking such a chance to accumulate the token capable of bouncing back to the all-time high value. Take BTC, for instance. The community continues to back the token, waiting for it to surpass the $65k mark and even the $100k mark by the end of 2023.

The utility of LTC is largely in investments. Retailers are lining up for a long shot. Whales would have held it for a short time. Since the token is estimated to take its sweet time in rising to a decent value, most retailers are bagging the opportunity to invest in BTC’s economical alternative.

Conclusion

Litecoin is exchanging hands on the trading board for $64+ value. The halving process has done more harm than benefit to Litecoin. If the utility and idea behind its creation are anything to go by, then LTC is lagging behind its inspiration. Whales take a back seat as retail investors flood the holdings until Litecoin shows potential. It remains to be seen whether Litecoin will make a profitable comeback.