Just like any cryptocurrency, the price of Litecoin can fluctuate quite a bit. With the crypto market being running night and day, the law of supply and demand is 24/7. So what is this law of supply and demand? It means that when the price of a digital asset is high people will be more willing to supply. Vice versa, when the price of a coin is low the demand and interest will in time increase. These two laws interact to determine the market price of Litecoin.
Due to the crypto market being a global industry, people are able to trade Litecoin at any given moment. Since the crypto market is relatively new, certain big transactions (whales) can affect the price of Litecoin.
Litecoin price history
Litecoin is the very first altcoin in the crypto market. Altcoins are defined as cryptocurrencies other than Bitcoin. Litecoin joined the market in 2011, which is two years after Bitcoin entered the scene. Let's have a look at important moments in the history of Litecoin.
1: The creation of Litecoin
The founder of Litecoin is Charlie Lee, an old employee of Google. The goal of Charlie was to develop a faster and cheaper version of Bitcoin. In the crypto market, Litecoin is seen as the little brother of Bitcoin and is even called ‘crypto silver’ where as Bitcoin would be the golden variant. The launch of Litecoin was in October 2011. After the launch of Litecoin, it immediately reached a price of 30 cents (USD).
2: Price peak in 2013
In 2013, Litecoin was already picking up the pace! In November, just two years after its launch, Litecoin reached a value of $50! When we have a look at the increase in percentage we see that there was an increase of 66.7%. Unfortunately, after reaching this value, the price drops back to around $5. Why did the price drop that dramatically? It is safe to assume that it had something to do with the Mt.Gox hack that occurred around that time. The Mt.Gox hack is an incident where 850.000 bitcoins got stolen. This event had an enormous impact on the entire crypto industry.
3: All-time-high price
The price kept hovering around the 5 USD mark, until 2017 came around. The breakthrough year of cryptocurrency. All crypto was skyrocketing and Litecoin was no exception. The price started to rise, after reaching the price of $50 in July reaching an all-time high price of $360 in December 2017. An explosive rise in just a few months.
4: After the all-time-high (ATH)
After reaching its all-time-high price the value of Litecoin decreased, just like any other crypto after 2017. The price became more volatile swinging below the $25 mark in 2018, but coming back up in 2019 to a price of 141 USD. A year after, the price of Litecoin was steady around 50 USD, until 2020 where things slowly started to increase again. Bitcoin reaching its new all-time high had a positive effect on the silver variant.
How is the Litecoin price influenced
Different factors determine the price of Litecoin. We already mentioned that the law of supply and demand is an important factor in determining the price of Litecoin. Again, it means when that when there are more buyers than sellers the price goes up. Contrarily, when there are more sellers than buyers the price will decrease. Besides the law of supply and demand, some other factors influence the price of Litecoin.
The price of other cryptocurrencies also influence the value of Litecoin. When we have a look at the value of other cryptocurrencies, it is remarkable that all coins have the same price movements. When we look at the price movements of Bitcoin we see that other currencies are following the same price pattern. Around 2019 a certain pattern became apparent, where the price of altcoins shifted when Bitcoin went up. Most of the times when the price of Bitcoin increases the value of Litecoin and other currencies increase as well. When we compare Litecoin with other cryptocurrencies, we can see that Litecoin currently the number five cryptocurrency on CoinMarketCap.
BTC - €15,900
ETH - €497.46
XRP - €0.527
LTC - €71.37
Another important factor is the media. When there’s a lot of positive buzz surrounding Litecoin, the price will go up and vice versa. Besides that, more positive news about Litecoin creates a certain amount of trust amongst its users.
The production process of Litecoin is called mining. There is only a finite amount of Litecoins that can be mined. This limited amount is capped and only 84,000,000 Litecoins can exist. Litecoin does this to keep the supply of Litecoin scarce. When 84,000 blocks have been mined, a Litecoin halving will take place. This is an ocurrence where the number of generated Litecoin mining rewards per block is halved. A Litecoin halving affects the supply and demand of Litecoin. Furthermore, this also affects the price because the demand stays the same. Since there is more demand than supply a halving (normally) has a positive effect on the price.
Another factor that can influence the price of Litecoin is regulations. Regulations can vary from country to country. They can both have a positive or negative effect on the value. For example, when rules become more restrictive it can have a negative influence on the price. On the other hand, regulations can help to generate more trust among people because it can helping with the acceptance and giving it a more ‘professional’ feeling.
The launch of Litebringer caused a positive significant effect on the price of Litecoin. Litebringer is a role-playing-game on the Litecoin blockchain network. Players can purchase items in the game using Litecoin. Real time use cases such as Litebringer make the project more fun, it being more than just an asset.
Future of Litecoin price
It is difficult to predict what the price of Litecoin will do in the future. However, we can look at the price developments over the past few years. In the price history of Litecoin, we saw that the currency can be rather volatile in the last few years. Furthermore, we concluded that the price correlates with the price developments of Bitcoin. Since there is a positive prospect for Bitcoin, the future of Litecoin is also seen positively. Besides that, the crypto market is still relatively new, so there is a place for many developments.