You must have heard that Litecoin is like silver to gold. In this context, gold being Bitcoin of course. Or that Litecoin is the poor man's Bitcoin just as silver is the poor man's gold. Litecoin is a copy of Bitcoin basically, very similar to Bitcoin in many ways in terms of its supply, inflation, halving, etc. If you don't know the differences yet, you hopefully will by the end of this article!
Litecoins are mined through computer hash power just like Bitcoin, but with a slightly different algorithm which was designed to make early competition fierce and more fair than Bitcoin. Other than that, Litecoin also changed its total supply compared to Bitcoin from a maximum of 21 million to a maximum of 84 million. And also changed its block time from 10 minutes to 2.5 minutes. Everything else is pretty much just like Bitcoin. The mining production halves every four years just like Bitcoin and for every Bitcoin, there will only ever exist 4 Litecoins.
#Bitcoin has had 3 halvings. #Litecoin has had 2 halvings. So Litecoin is one cycle behind Bitcoin! Not only that, Litecoin's supply is 4x of Bitcoin. First cycle, Bitcoin hit ~$1200 and #Litecoin hit ~$350. That's very interesting! It's almost 1/4th isn't it?!
#Bitcoin has finished its second cycle with a top at ~$20,000 while #Litecoin is still in the process of completing its second cycle. Now what's 1/4th of ~$20,000?! It's a whopping ~$5,000! Yes. Litecoin can reach ~$5,000 in this cycle.
If #Litecoin tops ~$5,000 in this cycle, let's see if we can predict the top of #Bitcoin shall we?! I personally don't think Litecoin can go higher than 0.05 $BTC in this cycle but will I be surprised if it goes higher? No! Either way, with 0.05 $BTC, the top of Bitcoin can be around $100,000! If however #Bitcoin calls it quits around where it is now which is $60,000 then the LTC/BTC ratio can pump to as high as ~0.08 $BTC! This will of course surprise many even Litecoiners including myself, but will still be way under 0.25 or 1/4th which is the absolute sane top one can ever imagine...
Now imagine you sell your #Litecoin below $1,000 in a bid to buy back cheaper. And imagine #Litecoin does top at $5,000 as my math seems to suggest it will. The correction will be around 80% from the top so the new bottom will be $1,000. Your bid to buy your Litecoins back cheaper will fail in this case!
Not. Financial. Advice.
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