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Litecoin's Best Days Are Behind It

Apr. 08, 2018 1:24 PM ETLitecoin USD (LTC-USD)
Skyward Investments profile picture
Skyward Investments


  • Litecoin Statistics.
  • Effect of Founder's Divestment.
  • Declining Interest In Litecoin.

(Source: CoinMarketCap)

Litecoin (LTC), founded by Charlie Lee, was supposed to be superior to Bitcoin for small, frequent transactions.

It was even called digital silver, while Bitcoin was called digital gold. However, reality often strays far from intent.

Litecoin Transaction Statistics


(Source: BitInfoCharts)


(Source: BitInfoCharts)

Bitcoin handles roughly 7 times as many transactions per hour compared to Litecoin. For a cryptocurrency that was supposed to be the frequent, small transaction size alternative to BTC, Litecoin has failed to catch up in terms of volume.

Besides volume, its median transaction value also proves that virtually nobody uses it for its intended purpose: small transactions, such as buying coffee or groceries.

(Source: BitInfoCharts)

(Source: BitInfoCharts)

In fact, Litecoin's median transaction value is significantly off-peak from its January 5th high of $5,594, yet its current (as of writing) median transaction value of $207.81 is still far from the average of $27.65 (National Grocers Assoc. 2013 study). (Just in case, adjusted for inflation, the previous figure is only $29.48–a minor difference.)

Litecoin Wealth Distribution

Another metric to track Litecoin's progress as a high transaction volume coin is wealth distribution.

(Source: BitInfoCharts)

As shown above, 45.1% of all Litecoin is owned by 100 addresses. The number of people with that share is likely much smaller, because people can possess LTC from multiple addresses. Meanwhile, there are approximately 81,000 active addresses in the Litecoin network. This means that 0.12% of all active addresses control nearly half of all Litecoin. I realize that wealth inequality is a natural occurrence in capitalistic markets, but in Litecoin's situation, this imbalance is a sign that people are not treating Litecoin as a medium of exchange, but instead as a store of value.

To make matters worse, even Bitcoin has wider distribution of wealth than Litecoin.

(Source: BitInfoCharts)


This article was written by

Skyward Investments profile picture
Investor with a focus on technology stocks.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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