The value of Litecoin, which is sometimes called “silver to bitcoin’s gold,” has increased by double digits during the previous week.
Despite a general market slump, the Bitcoin fork Litecoin (LTC) is having a moment, with a 15% gain in the previous week taking it to a new monthly high of $95 on Wednesday, according to statistics from CoinDesk. As of this writing, it has retreated to $92.
As a result of the recent price increase, Litecoin has moved up to second place on the list of the best-performing digital assets with a market capitalization of at least $1 billion. The Lido governance token (LDO) has had the most growth, at 36%. Lido is a liquid staking solution.
According to data provider Coinglass, the total dollar value locked in the number of active futures contracts related to litecoin — often called “silver to bitcoin’s gold” — has surged to $478 million, the highest level since early December.
Matrixport’s director of research and strategy, Markus Thielen, claims that the recent congestion on the Bitcoin network was beneficial to LTC because it reflected the rising popularity of Bitcoin Request for Comment or BRC-20 tokens, which are created using Ordinals and kept on the Bitcoin foundation blockchain. There were more pending transactions on the Bitcoin network in early 2021 than at any time throughout the bull market.
Litecoin’s network activity spiked once the LTC-20 split of BRC-20 was implemented. According to Messari, there were 580,000 verified transactions and 830,000 active addresses as of May 10.
“Over the last week, the price of Litecoin has gone up by 17% as Bitcoin transaction fees temporarily went up and traders looked for cheaper alternatives,” Thielen wrote in a note to clients on Thursday.
As Bitcoin’s network congestion eases during the next several weeks, Litecoin’s price may fall. The mining reward is halved every four years according to a predetermined algorithm, and historical data reveals that sellers tend to dominate in the 50 days before this event.
According to Matrixport, in less than 80 days, the Litecoin payout will be halved for the third time. According to Thielen, “contrary to market participants’ expectations,” Litecoin prices fell in the days preceding the last two halvings, with the optimal selling time being 50 days before the halving.
