Home / Litecoin / Litecoin 'Significantly overvalued', Hedge Fund credits of cryptocurrency

Litecoin 'Significantly overvalued', Hedge Fund credits of cryptocurrency


  bear litecoin price

Litecoin supporters, the seventh largest cryptocurrency, have long defined it as "the gold for bitcoin gold", the medium of exchange with the reserve of value of BTC. Just like the physical silver, however, litecoin is currently quoted well below its all-time high, having plummeted to around $ 55 from a peak of $ 358. However, according to the fund of cryptocurrency hedge fund Multicoin Capital, also that brand litecoin is "significantly overvalued".

Multicoin, which is a short LTC, exposes his thesis for the asset in a new relationship, created by managing partner Tushar Jain.

A maturing market and a Coinbase effect & # 39;

The Texas-based fund, via Jain, claims that LTC deals with a variety of negative catalysts without bulls to compensate them.

First, Jain argues that the litecoin upward trend in 2017 was mainly due to the ingenuity of retail investors and immaturity in the cryptocurrency market. As proof, he cites the fact that LTC was the "least expensive unit resource on Coinbase", one of the most popular trading platforms among inexperienced criptovalute buyers: the group most likely to not recognize that fractional currencies can be bought. [19659003] The currency no longer bears this distinction, however, since Coinbase has quoted ethereum classic (ETC) in August and has announced further plans to consider listing a variety of other assets, which promises to decrease the Impact that a quote from Coinbase provides for an individual cryptocurrency.

Debtable finance and development

  charlie lee litecoin bitcoin cryptocurrency "width =" 1388 "height =" 740 "srcset =" https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/ 2018 / 08 / charlie-lee-litecoin-bitcoin.jpg 1388w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/08/charlie-lee-litecoin-bitcoin-300x160.jpg 300w , https: //248qms3nhmvl15d4ne1i4pxl-wpengine.netd na-ssl.com/wp-content/uploads/2018/08/charlie-lee-litecoin-bitcoin-768x409.jpg 768w, https: //248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl .com / wp-content / uploads / 2018 /08/charlie-lee-litecoin-bitcoin-1024x546.jpg 1024w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/08/ charlie-lee-litecoin-bitcoin-640x341. jpg 640w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/08/charlie-lee-litecoin-bitcoin-360x192.jpg 360w "sizes =" (maximum width: 1388 px) 100vw, 1388px
LTC founder Charlie Lee sold his entire share while the currency was trading close to his all-time high. | Source: SV Ethereum / YouTube

Subsequently, Multicoin claims that the Litecoin Foundation is in a precarious financial situation to continue to operate effectively, holding only about $ 322,000 in assets – with 82% of those funds named in LTC.

The company claims that LTC does not have a unique development roadmap, which helps explain the lack of commits of LTC GitHub, with most of the LTC updates being bifurcated by Bitcoin Core.

  Litecoin Development "width =" 779 "height =" 289 "srcset =" https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/09/litecoin-github-commits.jpg 779w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com /wp-content/uploads/2018/09/litecoin-github-commits-300x111.jpg 300w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com / wp-content / uploads / 2018/09 / litecoin-github- commits-768x285.jpg 768w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/09/litecoin-github- commits-640 x237.jpg 640w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/09/litecoin-github-commits-360x134.jpg 360w "sizes =" (maximum width: 779 px) 100vw, 779px
LTC GitHub undertakes to master | Source: Multicoin Capital / Cryptomiso

With these factors in mind, Jain, like many other analysts, has called the founder Charlie Lee's decision to sell his entire LTC stake a "red flag", regardless of the intentions stated to that effect. . [19659003] "Despite its intentions, there is now a misalignment of incentives that reduces its motivation to continue development and add value to the protocol," wrote Jain. "To achieve this goal better, we would have liked to see it block its holdings or use it to fund further LTC developments."

Sell Pressures

Finally, Multicoin claims that the litecoin price will not be able to overcome the significant sales pressure that it will probably face in the near future.

To be clear, the report notes that Bitmain – the most valuable cryptocurrency company – owns over 1 million LTCs, according to a bunch of leaked investors. The company, led by CEO Jihan Wu, was a clear proponent of bitcoin money (BCH), which – as litecoin – aims to become the "digital money" of the Internet. As a result, Multicoin believes that Bitmain will eventually abandon the LTC, either to provide BCH with price support or to further force the litecoin into bearish territory.

Even in the absence of a looming risk, LTC faces continuous selling pressures from mining, a disadvantage that applies to all inflationary and disinflationary cryptocurrencies but whose effects will be particularly pronounced on an asset already facing significant negative catalysts.

Batting Down the & # 39; Bull Case & # 39; for Litecoin

 litecoin "width =" 1000 "height =" 667 "srcset =" https: //248qms3nhmvl15d4ne1i4pxl-wpengine.netdna- ssl.com/wp-content/uploads/2018/02/litecoin2.jpg 1000w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/litecoin2-300x200.jpg 300w, https: //248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-s sl.com/wp- content / uploads / 2018/02 / litecoin2-768x512.jpg 768w, https://248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/litecoin2-640x427.jpg 640w, https: // 248qms3nhmvl15d4ne1i4pxl-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/litecoin2-360x240.jpg 360w "sizes =" (maximum width: 1000px) 100vw, 1000px [19659003] Meanwhile, Multicoin believes the alleged cases of torus for litecoin – es which is an ideal means of exchange and / or a testnet for the Bitcoin network – they can not resist control

Writing in the company report, Jain targets the narrative that if the bitcoin is gold, al lora litecoin is silver. Jain states that this is a false analogy because, unlike physical gold, bitcoin will probably become a means of vital exchange in the future through the adoption of technologies such as Lightning Network (LN).

"Comparing digital resources with precious metals is a good analogy, but has no substance.The value of the relationship between silver and gold is based on the idea of ​​the price / weight ratio. low makes payments for smaller purchases cheaper.The digital resources are weightless and therefore the same analysis can not be done. "

Although there is room in the cryptocurrency ecosystem for a means of exchange not bitcoin, Multicoin argues that there is no reason why LTC will be the resource that fills this void:

"The adoption of Litecoin is generally demonstrated using qualitative evidence of merchants who accept Litecoin. Litecoin generally also accept a basket of other cryptocurrencies because cryptographic payment processors such as BitPay support a lot of cryptocurrencies: merchants do not explicitly choose to support payments Litecoin. Rather, they are electing to accept payment in any crypt, of which Litecoin is only one. "

Perhaps a stronger case is that as a member of the" Satoshi "tree, LTC can act as a live fire testnet for BTC, whose developers tend to move with caution to preserve network security. true, however, Multicoin argues that there is no reason why a testnet of this type should be worth $ 3 billion, lest the token holders present further rises from that sign.

LTC a & # 39; Relic of the Pre-Smart Contract & Age

Summing up the position of the company, Multicoin states that while LTC may be historically significant, its founding vision has become obsolete and has not been replaced by a valid roadmap Jane writes: "In reality, Litecoin is a relic of the cryptographic ecosystem of the pre-smart contract platform. The perception resulting from these obsolete narratives has led to a great divergence between current price and fundamental value. "

Concludes:

" At around $ 50, we believe that LTC is significantly overvalued. Given the lack of a valid investment thesis, non-existent positive catalysts and strong negative catalysts, we expect LTC to continue to underperform the cryptographic market substantially. "

Although wither, Multicoin's vision is not universally shared among cryptocurrency analysts." Last month, CCN reported that eToro senior market analyst Mati Greenspan said that LTC negotiates with a "huge discount" on its fundamental and technical factors

Images from Shutterstock

Follow us on Telegram or subscribe to our newsletter here.
• Join the CCN crypto community for $ 9.99 a month, click here
• Do you want exclusive analysis and in-depth analysis encrypted by Hacked.com? Click here.
• Open positions on CCN: sought-after full-time and part-time journalists.

Advertising


Source link