Litecoin (CCC:LTC-USD) is likely to do quite well over the next year. In fact, Litecoin is now the seventeenth-largest crypto in the world with a $13.8 billion market capitalization. LTC crypto will generally follow the path of other major cryptos like Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). It has shown a high correlation with these top cryptos.
For example, LTC crypto is up 58.5% so far this year, as of Nov. 2 at $200.04 per token. Similarly, Bitcoin is up a great deal during 2021 year-to-date (YTD). As of Nov. 2, it’s up 114.5% to $63,031.
Since Litecoin was meant to be an easier version of Bitcoin and was modeled after it, the performance will tend to follow the same direction. Granted, it hasn’t moved as high as Bitcoin, but it is not as well known and it does not have the same type of following as Bitcoin.
Performance Tracking Bitcoin
Bitcoin has been the uncontested cryptocurrency market leader since it launched in 2009. But Litecoin, which launched in 2011, and was one of the early cryptos, has been tracking Bitcoin’s performance, albeit not as great, ever since then.
For example, since Nov. 2 in 2019, in the past 2 years, Bitcoin is up 6.8 times from $9,235 per BTC token. Litecoin is also up, but not as much. It is now 3.25 times its price of $61.57 from two years ago.
In other words, given the YTD figures and the past 2 years’ performance, it appears that LTC crypto tracks Bitcoin’s, but with a 50% lag.
And why shouldn’t it? It was designed to be positioned as “a silver to Bitcoin’s gold,” according to its founder Charlie Lee in 2011. Silver has generally followed the upward trajectory as gold, but often it has underperformed.
For example, Litecoin has a similar feature as Bitcoin where its supply is reduced by half every several years. This helps keep the supply/demand curve for LTC crypto in balance with a bent toward an upward price as the supply of the Litecoin tokens falls.
However, Litecoin features some core changes, such as block times that are four times longer than Bitcoin. In addition, its supply cap is four times as large compared with BTC. So, again, it’s no wonder it has a 50% drag on its performance compared with Bitcoin.
Recent Developments with LTC Crypto
Litecoin has been making news lately in the finance world. In a twist of old finance vs. new finance, Litecoin recently announced via a tweet that it had teamed with VISA (NYSE:V) to issue a Litecoin debit card.
Litecoin’s virtual card is the only card that stays in Litecoin. The Litecoin balance is converted at the time of purchase in a sufficient amount to cover a purchase with a merchant.
So all you have to do is fund your Litecoin Visa card with a balance in Litecoin. It is sort of like a “secured” debit card if you will. The difference is that you get to keep earning more value in dollars as the value of your Litecoin balance grows.
In fact, you can also deposit Bitcoin, Ethereum and Ripple (CCC:XRP-USD) as well as Litecoin. Litecoin says that the LTC debit card can be used at all digital merchants that use Visa as their payment processor. They estimate this to be about 50 million merchants worldwide.
This is likely to shake up traditional finance as this kind of concept develops within the decentralized finance (Defi) universe.
For example, how long will it be before a mortgage company allows consumers to borrow money in Litecoin or another crypto? Payments might be made either in dollars or in the LTC or other crypto. This virtual Visa Litecoin debit card is just the precursor for something like this.
What To Do With LTC Crypto
So, despite Litecoin’s lagging performance with Bitcoin, you can see that the currency still has some ingenious developments. These could help it make up the traditional 50% lag in performance vs. Bitcoin.
Investors in LTC might find this an opportune time to invest in LTC crypto as a result.
On the date of publication, Mark R. Hake owns a long position in Ethereum but did not own any other security mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.