Early in trading the currency had declined to $46.04 from its high of $92.07 according to data from CoinMarketCap. After a sharp rally early in 2017, litecoin along with other major cryptocurrencies has been struggling. Announcements by the Chinese government appear to be one of the main factors causing the decline as discussed in an earlier Digital Journal article. BTCC a major Chinese cryptocurrency exchange announced it would cease trading at the end of this month. This appears to be only part of a major crackdown on cryptocurrencies in China as it had earlier banned initial coin offerings (ICO’s) by which some were raising funds to launch new currencies.
Litecoin has usually followed the movements of the key cryptocurrency bitcoin but has declined even more precipitously. Brad Shun , chief investment officer at Shuttle Fund Advisor said that Litecoin is even more sensitive to Chinese developments than bitcoin. He said that litecoin was dominated by Chinese investors. Lucas Geiger, CEO of Wireline echoed Shun claiming that there was a China effect that was amplifying sell-offs in some cryptocurrencies. The drop may also be exacerbated by profit taking as the currencies have had huge advances over the year.
Bitcoin had topped out at a high of $5,013 on September 1. Today saw a five year low of $2,951 from a start price of $3,226, but as this coindesk report went to press the price had recovered to $3,291. Just two weeks ago the market value of cryptocurrencies was $179 billion but slid as low as $98.95 but had recovered to $108.8 today at press time.
Litecoin is a peer-to-peer cryptocurrency using an open source cryptograhic protocol. Litecoin is both inspired by and in many respects technically identical to bitcoin but claims to have some technical improvements over bitcoin. Litecoin introduced Segregated Witness(segwit) and Lightning Network which will allow a much larger volume and quicker transactions than bitcoin as well as having lower transaction costs. However, bitcoin has now introduced Segregated Witness as well. Litecoin creator Charlie Lee hopes that Litecoin will be used for smaller transactions while bitcoin will concentrate on larger transactions. It remains to be seen if there will be room for both bitcoin and litecoin in an increasingly crowded field.
