A new report by Multicoin Capital suggests that Litecoin is significantly overvalued
According to the cryptocurrency fund hedge fund Multicoin Capital, also to that brand, Litecoin is "significantly overvalued." Multicoin which is short-lived LTC, exposes its thesis to the asset in a new report, created by the managing partner Tushar Jain.
The Texas-based fund, via Jain, claims that LTC faces a variety of negative catalysts, with no raised casings to be offset
The market has matured
To begin with, Jain argues that the Litecoin in 2017 was mainly due to the ingenuity of retail investors and immaturity in the cryptocurrency market. In fact, LTC was the "least expensive unit resource on Coinbase", one of the most popular trading platforms among inexperienced cryptocurrency buyers – the most likely group for not recognizing that fractional currencies can be bought.
The currency no longer bears this distinction, since Coinbase has listed Ethereum classic (ETC) in August and has also announced plans to consider listing a variety of other activities which promises to diminish the impact that one invention of Coinbase provides for an individual cryptocurrency.
The Coins Finances Raise Eyebrows
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 denominated in LTC.
In addition, the company claims that LTC does not have a single development roadmap, which helps explain the shortage of LTC GitHub, with most of the LTC updates being bifurcated by Bitcoin Core. With these factors in mind, Jain, like many other analysts, called the founder Charlie Lee's decision to sell his entire LTC stake a "red flag", regardless of the intentions stated in this regard.
Significant Sell Pressure
Multicoin argues that the price of litecoin will not be able to overcome the significant sales pressure it is likely to face in the near future.
By the way, the report finds that Bitmain – the most valuable cryptocurrency company – owns over 1 million LTC, 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
No reason to buy Litecoin
Meanwhile, Multicoin believes that the alleged cases of bull for litecoin – eg. which is an ideal medium of exchange and / or a testnet for the Bitcoin network – they can not withstand thorough scrutiny.
Writing in the company report, Jain refers to the narrative that if the bitcoin is gold, then 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 the 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 it is not possible to carry out the same analysis. "
" Relic of the Pre-Smart Contract "Age
Summarizing the position of the 39; 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. Jain ends his report by saying:
"By hovering at about $ 50, we believe that LTC is significantly overvalued, given the lack of a valid investment thesis, nonexistent positive catalysts and strong negative catalysts, we expect LTC to continue substantially underperform the cryptography market. "