BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Litecoin Rally Continues, Crypto Up More Than 7,500% Year-To-Date

Following
This article is more than 6 years old.

Litecoin has had a great year thus far, hitting a string of fresh, all-time highs and generating significant value for many investors.

Earlier today, it rose to as much as $341.72, representing a more than 7,500% year-to-date (YTD) gain, according to CoinMarketCap.

The digital currency, which is very similar to Bitcoin, has repeatedly made headlines this year by producing sharp returns.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment]

After fluctuating close to $100, Litecoin prices began experiencing some robust gains within the last week, climbing more than 200% in that time.

As for what factors have driven the digital currency's price higher, analysts pointed to several factors.

Surging Interest

Interest in digital currencies has grown sharply over the last several months.

In November, major cryptocurrency exchange Coinbase added 100,000 customers in a single day, CNBC reported.

"Litecoin is finally benefiting from the broader interest in Cryptocurrencies," said Cryptocurrency investor and influencer Oliver Isaacs.

"The recent price surge has been the result of heavy trading volumes on one of the most popular exchanges GDAX and the uptake of new users on Coinbase." 

Many investors have been getting involved due to FOMO (Fear Of Missing Out), said eToro senior market analyst Mati Greenspan.

"Cryptotraders are rushing in to catch this parabolic wave and it is causing a liquidity crunch," a situation where demand exceeds supply, he stated. 

Greenspan said that while "This can cause very rapid swings in any market. With a market like cryptos where liquidity is already thin the potential to cause an explosion is even greater." 

'Comfortable Entry Point'

While many investors are taking interest in digital currencies, these innovative assets "can be scary for newcomers," said Jeff Koyen, strategic advisor for 360 Blockchain.

It's one thing to learn that hundreds of coins and tokens are traded on exchanges. It's another thing to start buying coins called Verge, Mona and 1337. Litecoin is a comfortable entry point to the crypto world just beyond bitcoin.

Many of the larger digital currencies are rallying right now, emphasized Marius Rupsys, a cryptocurrency trader. "So Litecoin was just a bit earlier to start the rally, but other coins joined very quickly and likely will make even higher returns by the end of 2017." 

Diversification

While Bitcoin is the world's largest digital currency by market capitalization (market cap), investors may increasingly put their assets into altcoins in order to maintain proper diversification, said Isaacs.

"As cryptocurrencies are becoming increasily accepted by mainstream investors, institutional investors and hedge funds, I think investors will be looking to diversify their portfolios away from Bitcoin into altcoins like Litecoin," he stated.

Such developments could make it so other altcoins, for example Ether and Ripple, rally in unison.

Disclosure: I own some Bitcoin and Ether.