Prospects for Litecoin Rally in 2023

Litecoin was created in 2011 with the goal of facilitating faster and cheaper transactions. Blocks are created in fourtimes faster, and the transaction speed reaches 56TPS versus 7 TPS for Bitcoin. At the same time, the coin needs to be mined in the same way, the emission is technically limited, and the block mining reward is regularly reduced. Comparing these two coins, Bitcoin is called gold and Litecoin is called silver.

Despite the similarities with Bitcoin, furtherразвитие рынка, в том числе выразившиеся в появлении сверхбыстрых сетей с поддержкой смарт-контрактов, привело к падению Litecoin со 2 на 13 позицию общего рейтинга по капитализации. Для «серебра» монета выглядит недооцененной, и у нее есть аргументы для потенциального ралли в 2023 году.

 

Image source: coinmarketcap.com

 

Recovery of the crypto market

The overall decline in the market last year was due tothe actions of the Fed, as the tightening of monetary policy led to an outflow of liquidity from risky assets. This, in turn, exposed the failure and breach of trust of a number of crypto projects. Most unlucky players have already left the market or are going through bankruptcy proceedings.

This year, the pendulum is ready to swing back.direction. A number of economists believe that February-March will be the last months when the Fed raises rates. A further pause, and even more so a rate cut, will lead to an increase in demand for risky instruments. Especially in conditions of relatively high inflation.

Image Source:arcane.no

With the general rise of the crypto market, altcoins are growing stronger than Bitcoin. This trend was seen in both the 2017 rally and the 2021 rally. Below is a graph of the market share of Bitcoin and altcoins.

Image Source:coingecko.com

Litecoin was no exception to the rule, showing growth against Bitcoin before the ban on financial institutions in China in May 2021 from carrying out cryptocurrency transactions.

Image Source: Cryptocurrency ExchangeStormGain

 

Regulatory guillotine

Unexpected support for Litecoin could bestatus change from digital currency to security of coins on PoS: such plans were announced by the chairman of the SEC on the day of moving Ethereum to a new algorithm. If the regulator succeeds in this direction, the largest crypto exchanges are likely to refuse to support such coins.

If stablecoins and coins on PoS are excluded from the overall rating, then Litecoin will be in third place after Bitcoin and Dogecoin (Ripple is excluded, since the SEC has similar plans for it).

 

Halving

Halving is a deflationary mechanism aimed atto halve the income from block mining. In the long run, this drives up the cost. In 2023, Litecoin will be the first of the largest networks on PoW to halving - the reward will be reduced from 12.5 LTC to 6.25 LTC. This is expected to take place on August 3rd.

 

Total

The arguments above point to a highthe likelihood of the altcoin outperforming Bitcoin in the event of continued recovery of the cryptocurrency market and a significant rise in the overall rating in the event of a change in the status of the coins to PoS.

 

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)