Litecoin is a first generation cryptocurrency that is literally a copy of Bitcoin, and the way I see it, this is just dead. I can't believe people are still buying, trading, and using Litecoin, because it just seems totally irrelevant to me today. I used Litecoin in 2017 and 2018, and what would I want to do with it today? So I'm going to explain to you in this crypto review why I see Litecoin on its way to zero. There's so much better that you could have in your portfolio. There's no way I would want this in mine.
The Litecoin price: three bull-market highs and a long way down
Start with the Litecoin price. It has had so many markets over the years. It had a pump up to $10 in 2013. This is actually one of the few cryptos that has made three bull market highs in a row, hitting in the 30s in 2013, then into the 2-300 range in 2018, and then a little bit above that in 2020. But I think we've completely topped out for Litecoin. I think it's going to consistently be nothing but down from here. These are my opinions from watching this market for years, not financial advice.
You've got rampant hype and speculation, people talking about proof of work blockchains and basically looking for something exactly like Bitcoin, but for some reason better. The price action for Litecoin has totally been down in the last year, almost all red, except for a couple of speculative, narrative-driven pumps, which quickly faded. Everybody who knew what they were doing sold as soon as those narratives came through. So I don't think this goes very well for Litecoin. This is the kind of critical coin review I keep filming in my Money playlist.
A copy of Bitcoin that never got its spot back
A viewer shared an article with me titled "What happened to Litecoin," and it's even more relevant now than when it was written two years ago. So a little background: Litecoin came out just two and a half years after Bitcoin's first block was mined. It came out as an idea for a faster, more fair crypto. But if you Google Litecoin, it's an open source project whose code is copied from Bitcoin's. We literally just copied Bitcoin's code and put its new chain up. So Litecoin continued to use proof of work.
Litecoin has already had its high. It's had its time in the spotlight, and it's never getting it back the way I see it. It was the second largest crypto by market cap until September 2013, and it was a top three coin in 2016. But what happened? Ethereum. You got this better technology that came out and knocked it out, where you could now put smart contracts on chain. Litecoin has never regained that spot from Ethereum. And then you have all these Ethereum copies that come out, which make Litecoin more and more irrelevant. At the time that article was written, Litecoin wasn't even in the top 20. Today it actually is, which absolutely shows you how insane the crypto market is.
Who's actually buying Litecoin?
Despite the fact that almost all this does is go down, people continue to buy it because they don't know any better. And who's buying Litecoin? Well, they're hyping up that Grayscale is buying it. Now, that doesn't seem like a good idea to me. Maybe the people at Grayscale don't know any better, but I don't see why you would want to have Litecoin in your portfolio, because there are so much better options available. As that article says, what once was new and exciting is now old technology. The same kind of crowd buys whatever has a hot narrative, which is exactly why I think HYPE is the most dangerous altcoin in the top 20 for very similar reasons.
And despite Bitcoin, as I've repeatedly said, being objectively inferior to everything else, there's not much of an advantage for something that's a slight improvement over Bitcoin. While back in 2018 the transactions were faster and cheaper than Ethereum and Bitcoin, that's just not relevant today.
What can you even do with Litecoin today?
When you've got things like Internet Computer, this tech is so far past Litecoin it makes it totally irrelevant. You can put a gigabyte of data on chain in smart contract memory and run your entire application, and the transactions are nearly free. I just tipped a guy in my open chat 43 cents — big spender, I know, but I've done some big hundreds-of-dollars tips in there too, and I just did this one as a demo. The transaction fee was one cent, and it sent in a few seconds. More importantly, this is an application on ICP called OpenChat. It's fully on chain, and all kinds of cryptos are on there, from ICP to chain-key Bitcoin, USDC, and Ethereum. I can send any of these almost instantly with transaction fees directly. That tip was paid in USDC — I didn't have to pay it in ICP. This has massive functionality, and people can use it without any gas fees.
What can you do with Litecoin? You can't even sell an NFT. They have done their version of ordinals, so maybe you can transact some of those, but this is doing three transactions per second. This is a total ghost chain. The entire blockchain is 161 gigabytes, which is definitely smaller than Bitcoin's entire blockchain, which is like a half terabyte at this point. But three transactions per second — compare that to ICP, which is doing thousands of times as many transactions per second as Litecoin, because ICP is doing stuff like serving entire websites. Litecoin is so old and irrelevant at this point that it seems crazy anyone would buy it. The only reason I can see people buying it is because they don't know there are better options. This contrast is why I've written about the one altcoin I love after researching thousands, which is the Internet Computer.
Charlie Lee sold the top
What's funny too: if you look up Charlie Lee, he's the creator of Litecoin. That tells you how easy this was to make — one single person could create Litecoin. But what gets better is that Charlie Lee actually dumped his Litecoin holdings at the top in 2017, which was a good move. If you look at the price chart, while technically it was higher in 2021, that took four years later, and if you account for inflation, the US dollars at the top versus the price of Bitcoin was a much better deal in 2017 than now. So the guy who founded Litecoin, the director of the core team at the Litecoin Foundation, dumped his Litecoin at the top.
Proof of work isn't a sustainable business model
What's very problematic for the business model of Litecoin is that proof of work is not a sustainable business model for actually developing the technology. If the core team is not running a bunch of machines mining the currency itself, then the core team has no paycheck. And that's why, as a viewer pointed out, there are two developers. You have one full-time developer and then another full-time developer. You literally have two developers. Then you've got some directors, strategic partnerships, and marketing, and some advisors — but look at this one: key contributors and volunteers. Anything that's running on volunteers in a world of crypto and making money is not where I want to invest. If you're depending on volunteers, it shows you don't have a great business system. I get into the reasoning behind picks like this every day with the people inside the Jerry Banfield Family.
DFINITY doesn't have to depend on volunteers. Why? Because they have a 15-plus percent APR they can get just by holding and staking the tokens they already have. Now, some of you think that means ICP is doomed to have this high inflation rate, but it actually isn't. There were about 520 million ICP in circulation today, and about 500 million a year ago. So if you do that inflation off the top of your head, that's like 4%. So ICP has this incredible business model that can support the largest research and development team in blockchain. Even if the price stays stable — not to mention if it goes up — there's a lot of money to hire a whole lot of people. That's why there are hundreds of people, engineers, tech leads, and developers working at DFINITY.
So why would I want to invest in two developers and some volunteers and a guy who dumped his Litecoin at the top what is now seven years ago? It's insane to me that anyone thinks this is anything but a dead chain at this point.
The proof of work narratives were wrong
Everything you look at — the only way people think this is good is purely through narratives. Narratives like proof of stake is not going to be allowed by the SEC, so all the proof of work chains pump. That's ridiculous. And now we're seeing Ethereum ETFs, and everybody who was pushing those proof of work narratives was blatantly wrong and got people investing in tech like Litecoin. Why would you invest in 13-year-old technology that doesn't look like it's made any meaningful advancement? If you've got something like ICP that's rapidly advancing, that has a Bitcoin and an Ethereum layer two on it — it could put a Litecoin layer two on it if they wanted, that'd probably be easy, but there aren't enough transactions to even merit that. It eliminates the need for oracles and it's transforming the entire internet. And there are two developers at Litecoin. This is nuts. When I look at a coin and my honest answer is zero, I say so, the same way I did when I explained why my realistic price prediction for Kaito AI is $0.
My verdict: a dead chain bleeding slowly
So Litecoin — I don't see anything that I like about it at all. This is just going to zero, the way I see it. It's an old crypto that's just bleeding slowly, and randomly people mining it are trying to pay for publicity, probably to keep their holdings alive. But it's dead. So no, no way I'll hold Litecoin ever again. I'm sharing my own experience and opinion here, not telling you what to do with your money — but if you enjoyed this critical crypto review, this is exactly the kind of honest take you all keep asking me to film.