After kicking off 2018 with a bang, cryptocurrencies tumbled like a house of cards by the end of the year. The fallout was so stark that the broader market ended losing more than $700 billion in market cap. All in all, it was nightmarish for investors worldwide.
That said, many have always remained bullish on the fundamentals that govern the asset class, especially when it comes to crypto/blockchain projects that have stood the test of time and are backed by a robust combination of steady technological progress and supportive communities.
Litecoin and Ethereum — the altcoins we’re going to zoom in on today both fit the bill on that front.
Both these assets have been around for a while now, and they usually exhibit some degree of stability — relatively speaking — as Bitcoin drags along the broader market while undergoing sharp fluctuations.
But are they currently in a position to bring some much-needed relief to the crypto community in 2019? Let’s find out.
Litecoin vs Ethereum: Which is Expected to Bounce Back Faster?
One of the oldest cryptocurrencies in circulation, Litecoin first came into existence in 2011 as a fork of Bitcoin under the MIT/X11 license. It’s currently the eighth most popular cryptocurrency with a market cap of just about $1.9 billion.
At the height of the crypto boom of 2017, Litecoin surged all the way up to $350 and more. However, more than a year of lingering slowdown later, it is currently valued at just about $32.
|Price||Market Cap||Circulating Supply|
|Litecoin||~$32||~$1.9 billion||60+ M LTC|
|Ethereum||~$117||~$12 billion||104+M ETH|
Ethereum is comparatively younger with its public release dating back to 2014.
However, because of a number of factors, including its uses beyond cryptocurrencies, it climbed up the crypto charts rather quickly and soon became the second most popular digital asset after Bitcoin by market cap. (Although, it is stuck on the third spot currently after being outperformed by XRP).
As of today, the price of Ethereum is hovering around $120, which is soul-crushingly low for someone who invested in the asset back in early January 2018 when the coin peaked at an all-time high of $1,400+.
That said, the million dollar question investors are currently asking is how long until Litecoin and Ethereum bounce back from this downward spiral.Unfortunately, there are no signs of any immediate reprisal for either.
However, keep in mind that most of these forecasts are purely speculative and are not backed by any verifiable/reliable method or data. You might want to take them with a pinch of salt.
A lot Depends on the Stability of the Broader Crypto Market
While it is possible that the broader crypto market will get hammered some more in the coming months, many investment experts are optimistic that 2019 is the year when crypto volatility will finally begin to subside. Institutional investors are expected to play a key role on that front.
The Institutional Phase of Crypto may Have Already Started
There are several factors why many industry insiders believe that institutional investors are likely to flock to the crypto space in large numbers in 2019, including:
- Regulators in a number of major economies are by now convinced that crypto is here to stay and therefore, preparing to introduce regulatory frameworks to oversee the sector.
- The number of quality custodian solutions for digital assets is constantly on the rise.
- The adoption of crypto futures, forward contracts, and derivatives are gaining momentum.
- The odds are high that the U.S. Securities and Exchange Commission will soon grant approval for a crypto ETF, opening the floodgate for others as well.
In fact, industry experts like Tom Surman (Director at Every capital) are of the view that the crypto space may have already quietly slipped into the institutional phase.
Surman’s assessment makes sense considering that a number of Wall Street heavyweights, including the likes of Goldman Sachs, Fidelity, and Blackrock, are already knee-deep in their own crypto/blockchain ventures. And here comes the interesting bit — in an industry known to be particularly prone to a herd mentality bias (read: monkey see, monkey do), the crypto ventures undertaken by these companies are believed to have already triggered a chain-reaction of similar initiatives by other institutional players.
Institutional Investors can help stabilize the market by “anchoring” market whales, controlling vast volumes of crypto holdings that can alter/distort crypto prices without any notable consequences.
However, unlike retail investors, institutional investors are not at liberty to manipulate the market on a large scale — especially since regulators will be there to scrutinize their every move.
Therefore, greater participation by institutional investors can actually benefit the market by stabilizing prices of major crypto assets.
Litecoin Prediction for 2019
There are a number of reasons to be optimistic about Litecoin’s outlook in 2019. But before we delve into that, let’s get a couple of things straight:
- Bitcoin will, hands down, remain the most prominent digital asset for the foreseeable future.
- The performance of the broader market in 2019, including that of Litecoin, will inherently depend on the performance of the most popular crypto in the world.
As prices stabilize in a largely-regulated crypto economy with a greater degree of participation by institutional investors, Bitcoin may witness a second wave of growth.
To quote Joel Kruger, currency-strategist at LMAX Exchange:
“[….] There is a tremendous potential that comes with decentralized, digital, peer to peer currency, and as we begin to see the possibilities more clearly, Bitcoin will regain its footing and get back to trading to the topside.”
“This leaves us with an outlook for Bitcoin in 2019 that could see a continuation of weakness in the first half of the year before the market finally stabilizes and starts to make its way back up in anticipation of what should be an impressive second wave for crypto assets.”
As always, any positive development in the Bitcoin network will directly lead to a surge in Litecoin’s performance. Not just because Bitcoin’s growth eventually trickles down to Litecoin, or for that matter, to all major cryptocurrencies, but also because of Bitcoin’s scalability issues.
When the market is bullish, and Bitcoin is steadily surging, the added traffic in the Bitcoin network usually clogs the system and leads to higher transaction fees. In such scenarios, Litecoin, with its quicker block time and lower transaction fees, will definitely draw a significant chunk of the usual Bitcoin traffic to its own network.
Moreover, because of its higher liquidity and faster transaction speed (2.5 minutes against Bitcoin’s 10 minutes), Litecoin is much suited for smaller transactions, which in turn, adds charm to its everyday usability, such as while buying groceries.
Other factors hinting towards an increased demand for Litecoin in 2019 include:
- Mining Litecoin is (arguably) more convenient because of the new Proof of Work algorithm.
- It is less volatile than most of the other major cryptos.
- Users can easily atomic swap between Bitcoin and Litecoin.
- Litecoin is compatible with the Lightning Network, which further adds to its speed.
- Nearly all hardware wallets support it.
And finally, there will only ever be 84 million Litecoin tokens, of which more than 60 million tokens are already in circulation. This means Litecoin is a progressively becoming more scarce compared to, let’s say, Ether and most other cryptos.
Of course, we are still far off from witnessing Litecoin exhausting its supply cap, but that’s not stopping strategic investors from viewing it as a worthwhile long-term investment opportunity.
Ethereum Predictions for 2019
Ethereum has shed nearly 90% of its value year-on-year as of press time. That’s a whopping loss — perhaps the worst performance among all major virtual currencies since the current slowdown started.
On the brighter side, unlike Litecoin, Ethereum is not a cryptocurrency through and through. It also doubles as a platform that facilitates “smart contracts” powered by Ether, the native cryptocurrency element of the Ethereum network.
You can find more information on smart contracts in our detailed coverage of how Ethereum smart contracts work, but in short, Ethereum is currently the most popular smart contract platform around despite growing competition.
A large number of corporations and organizations use Ethereum smart contracts to create their own products. This demand is vital for Ethereum to retain the clout as one of the top-3 cryptos in the world. With increasing uses of the platform, it will gradually draw more and more movement, which in turn, will boost the price of the cryptocurrency as well.
Despite plummeting prices, 2019 is expected to be an exciting year for Ethereum. Especially considering that the widely-anticipated Constantinople hard fork will hit the sometime in late February 2019. Once that happens, the average block time will start surging and is likely to push the difficulty bomb to near about half-a-minute.
Another major development will be Ethereum 2.0 incorporating the Casper upgrade, the next-generation proof-of-stake algorithm in the network, as well as the addition of sharding.
In ConsenSys CEO and Ethereum co-founder Joseph Lubin’s words, these finer details reflect the potential of the Ethereum network much better than market capitalization statistics do.
Market cap doesn't reflect activity. Decentralized networks are growing.
— Joseph Lubin (@ethereumJoseph) December 1, 2018
So that was a rough overview of some of the major developments investors can expect from Litecoin and Ethereum in 2019. As for price predictions, I intentionally avoided citing specific figures because making long-term predictions in the volatile crypto market is futile, and once again, it all depends on how long until the market stabilizes.
That said, the fundamentals are currently strong for both Litecoin and Ethereum, meaning when the market finally bounces back, both these coins will be there at the forefront of the next wave of growth along with Bitcoin.