First of all let me tell you that i studied economics this past month to just understand the dynamics therefore i might be wrong in some of my arguments.I would like to be corrected if you think something is wrong.Before the era with no “crypto-currency”, economics was utterly boring for me.Oh and before i start i highly advice you to read this if you are like me: Economics in One Lesson. By the end of the book i was good to go :). If you are here reading this i assume that you already know Bitcoin and possibly Litecoin.Over the past year bitcoin might be the best investment that any human has ever seen , in mid february 2013 it was around 23$ and it hit 240$ all time high mid april.It is valued at 410$ today..It is a classic high risk high reward investment that could even be tought at economics schools because its a one hell of an extreme case.I for one banging my head to the wall because i missed that bandwagon when bitcoin was 4$ each. A lot of people like me second guessed its potential because we were in unknown territory.And of course i was a student back then.. Even 4 dollars mattered :).Here is the graph of bitcoins development :
Now if you can focus on between mid february and mid march you will see the steady rise , but you also see the two big red lines , those are the people that never imagined bitcoin would beat 30$ per 1 capita.What’s incredible is that even though a lot of people who invested around 10$ started to sell like crazy at 28$ , bitcoin kept its steady move towards rising.Chinese markets were being introduced to bitcoin at the same time so thats a big influence.With bitcoin rising steadily , people jumped the bandwagon which once they distrusted.You can clearly see the 240$ record line mid april.When bitcoin hit 240$ it immediately dropped to 235ish , people saw the big red candles (big drops in value) and they started to dump to make the most out of it.
Today it is sitting at 400$ but a lot of serious investors commenting that it will go up to 1000$ in a year.They are telling that its not even near its real value.And i think they might be just right. With incredible hype , ease of transactions, decentralized system we now think they are right and its undervalued.But the problem is from now on its hard to invest in bitcoins because it got really expensive , at the same time it is much more self proven that it is here to stay for a long time.I for one cannot invest in bitcoins because of the price so i really looked for an alternative..In comes litecoin, a new crypto-currency compared to bitcoin.One that is risky to invest in but it definately bears the potential to reward its investors.It is now valued at 4.1$ and for you to double your invesment , litecoin reaching 8.2$ is a really realistic opinion.From day to day there is a hype over litecoin that is being created by mostly the people who missed the bitcoin wagon.But such a hype that is maybe powerful enough to ignite the rocket to the sky :).Hype = demand and demand=increase in value + mining difficulty going up by time being passed = increase in value.
For the long term of lite coin , here is my toughts :
First and foremost it needs market adoption.For example Shopify integrating btc payments was a huge move forward for the crypto coin stage(70000+ merchants).Acceptance to top exchange web services online (mtgox and other big china exchanges),positive press is key. If these requirements were to be made.It is a guarantee litecoin will live long and prosper.It also has the transaction time advantage which is huge for retail..The faster transaction time and lower practical time to make money available in an exchange is an advantage for LTC. The thing is, a place like Starbucks is probably going to want to use off-chain transactions. That means using a service like Coinbase where you keep a bit of a balance or perhaps have some credit and are able to make payments from there. Or maybe you load your Starbucks card with LTC. Time is of the essence in retail but Litecoin will make a great back end for moving larger amounts of money or for mom and pops who don’t mind a little zero-confirmation risk in order to stay clear of any big companies.
Overall i think that its a great time to be an early adopter of the litecoin.We know that MTGox announced that they will support Litecoin, the question is when..When ltc hits mtgox and the development of special hardware for mining litecoin comes up , ltc’s value will increase greatly.
BUT ! do note that these are all my own opinions and i am CLEARLY not a legitimate investment consultant :) Think in depth , make observations , talk to logical people , be aware of the risk and NEVER risk the amount of money you can’t handle losing.
Have a great day ! :)