Litecoin as a hedge?

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17th Dec '24 by Charles

16 comments 527 reads

I’ve been looking into Litecoin (LTC) lately, and I think it’s worth considering. It’s often called the "silver to Bitcoin’s gold" because it’s similar to Bitcoin but with faster transactions and lower fees, making it more practical for everyday payments.

With the potential approval of Litecoin ETFs and growing institutional interest in crypto, it seems like Litecoin could be positioning itself as a solid investment opportunity. It’s not as hyped as Bitcoin or Ethereum, but its track record and utility give it real staying power.

What do you think—does Litecoin have the potential to shine?

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About the Author

Charles

Premium Member

16 comments

N0vice1Nvest0r

17th Dec '24

All I would say is check how active it is in its development, what are the latest projects opening on Litecoin network? And what is the latest news surrounding it?

Personally I wouldn't touch it with a barge pole!

The only thing I'll be watching, is to see that IF LTC hits 400 again, will that again be the trigger for the top of the bull run?

Crypto is ridiculously high risk and unbelievably volatile! Theres better investments with less stress! In my opinion, of all Crypto, this would be one of the worst crypto investments!! But what do I know!?

epo001

31st Dec '24

What do I think? I think that crypto is gambling for those who find the lottery too intellectually taxing.

shauniekent

31st Dec '24

Litecoin being silver to Bitcoins gold is the narrative from several bull markets ago and really isnt the case. Litecoin is a copy of Bitcoin with some tweaks - made many years ago. No-one actually uses it to store long term value. People do use it to trade, similarly to other crypto assets. And it suffers the same fate as all those other assets. The below chart shows Litecoin price in Bitcoin - its a long term declining chart, with the occasional pump.

If you do buy Litecoin or another crypto - i'd advise you to do it only as a short term gamble. Better still, ignore them all and buy Bitcoin.

Alphaflight

31st Dec '24

"Litecoin is a copy of Bitcoin with some tweaks - made many years ago."

Fortunately "real stuff" such as physical gold, silver and platinum can't be copied. These physical assets will likely prove to be superior hedges to digital tokens (bitcoin, litecoin,...).

shauniekent

1st Jan

Ok so perhaps to help people such as yourself AF - the Bitcoin protocol and code can be copied - and has been as least manay dozens of times, But Bitcoin the network cannot be copied. Copy the facebook code and webpages to a different UR and see how far you get.

A core tenet of Bitcoins value proposition - the unchangeable monetary policy and extremely high settlement assurances cannot be copied. Understand that - deepy - and you'll start to apprecitate Bitcoon's improvement over Gold. I am a former Gold bug fwiw.

Dive into the history of protocols, it's fascinating. The web protocols we still use today are decades old, despite being trivial to 'copy' and many improved alternatives being available.

dmjram

2nd Jan

My toenail clippings exhibit the same characteristics as bitcoin - unique code with finite supply and declining yield.

Equal intrinsic value of c0.

Maybe I should put some gold spray paint on them?

N0vice1Nvest0r

2nd Jan

To be fair I do believe there is a way to invest crypto, given the same research as you would a decent stock. But Crypto IS NOT something people should be putting a lot of their capital into!

At best it should be a hedge(?) a 1-5% holding MAXIMUM.

I have some crypto and im lucky enough to say what's in there is all profit, and I took profits when BTC hit 50k and 100k this year.

Personally I despise LTC, in my opinion, if BTC is compared in strength to Apple (NSQ:AAPL) lets say, then I would compare LTC to Nokia Oyj (NYQ:NOK) and that's being kind. You could even say BlackBerry (NYQ:BB).

People need to be careful of hype, whether that's from Trump taking office who is apparently pro crypto, but also a pathological liar. At the same time remembering that Bitcoin always goes in cycles and is due to go into a bear market. Whether that's now or in 6 months.

I totally agree with Shauniekent, if you want a gamble in crypto, then realistically it has to be Bitcoin. But are you really going to buy now, after a year of a bull market run, very close to its ATH, when history shows that Bitcoin normally makes a new ATH and then dumps up to 70% over the next 2 years.

Be careful with crypto, ignore the hype, think for yourself, and please please please make sure take some profit.

One final point for any doubting a Bitcoin crash/bear market. Don't forget that bitcoin was created after the 2008 financial and people wanted to be able to control their own cash, without government interference or regulation.

Should Trump be Pro-Crypto, then that would potentially lead to some sort of regulation and mass exodus by those that originally entered early and held for years. So could mean a huge whale sell off.... Just a thought.

shauniekent

5th Jan

At what future date and Bitcoin price would you be willing to consider that you might be wrong? (It's 15 years old and c. $2 trillion market cap at present. )

andrewdb

5th Jan

It depends where you live.

I am lucky enough to live in the UK. In this country BTC etc is mostly an enabler to for you to pay for guns / drugs / blackmail / things you really do not want the authorities to know about (* - basically a substitute for $100/€500 notes). This is probably true for the rest of europe and the us.

The same is not true of other parts of the world. If I lived in Zimbabwe/ China/ India (where high denomination cash was 'cancelled' at short notice), basically any country with currency controls or hyperinflation or an untrustworthy currency or where currency exchange is *very* expensive, I completely see the point (**)

(*) I came to the conclusion coins are just high denomination cash when BTC was ~$10 (**) I understood some currencies cannot be trusted when BTC was ~$60k. It remains true that the NPV of all these "coins" is and always will be negative (they have no intrinsic value and it costs more money to transfer ownership than it costs to transfer an equivalent amount of cash ***).
Early hodlers of BTC may feel free to disagree from their private estates / islands / countries / dormant volcanoes / jets.

(***) Actually when the cash amount gets beyond what you can fit in a suitcase, it probably is cheaper to transfer BTC - the russians are having to ship lots of oil around and fly lots of gold around atm and that must be really inconvenient.

intuitive6191

5th Jan

Lyn Alden gives a useful overview of bitcoin via her monthly newsletter. The latest newsletter can be accessed below and covers how bitcoin is used worldwide to protect against currency debasement.

https://www.lynalden.com/decem...

As regards Bitcoin and crime, the net is slowly closing. Apparently the UK Government is planning to implement the Crypto asset reporting framework which is described as an international standard re the automatic sharing of crypto data and identifying account holders in the UK.

If anyone is interested in the traceability of Bitcoin, this is an interesting story.

https://en.wikipedia.org/wiki/...

dmjram

6th Jan

It's spot price at any time is irrelevant to me. It's about knowing what you invest in, what you trade.

Bitcoin is a highly volatile speculative digital instrument. I've owned it in the past and might well again in the future.

When are you going to accept that it's volatility and stomach churning drawdowns for the HODL's mean it is neither a store of value nor a currency?

shauniekent

13th Jan

I'm being sincere in asking if there is aprice and market cap at which you migt re-assess your opinion. For example if it rose to $50 trillion market cap along with the ensuing reduction in volatility that size brings, would you perhaps start to see it differently?

Yes Bitcoin is volatile, which is easily managed via position size as i'm sure you know.

It's absolutely a store of value, but not for you.

N0vice1Nvest0r

13th Jan

I'm intrigued by your views on BTC dropping 12% since this post, and LTC dropping 23%. I'm not saying it won't fly in the future (I don't think it will), but surely if it was a hedge, wouldn't it do better than BTC???

dmjram

13th Jan

My opinion is that bitcoin is a volatile digital instrument. My opinion fits the observed facts. The market cap is not a relevant variable in assessing its nature. It's price action is.

Volatility isn't managed by position size, total drawdown of invested assets is (hopefully)

How on earth can something that periodically goes down 80% be a store of value?

shauniekent

13th Jan

Ok, perhaps a better question then is what would volatility need to drop to for you to re-assess?

Maybe a better phrase than store of value at this point in Bitcoin's adoption is 'long term store of value'. It stores value fantastically over 4 year periods or more. Shorter term than that and you may see its price 'underwater'. However you are likely to see price appreciation beyond 4 years as global adoption continues. This wont carry on forever though. At some future point it will become fairly boring,

dmjram

14th Jan

Take your pick of volatility measures e.g. gold ATR % c1%, Bitcoin c5%

When the facts change I'll change my mind that bitcoin isn't a volatile digital instrument. It will have become a more stable digital instrument or it will have reverted to its intrinsic value of 0.

In the long run we're all dead, as a long dead wise man once said.

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Litecoin as a hedge?

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Charles

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