Litecoin creator Charlie Lee is striking back at what he calls a “concerted effort to suppress” the LTC price on the party of bearish traders and hedge funds who are attempting to short the coin.
Writing in a thread posted on Twitter, Lee — who created LTC in 2011 and now develops it full-time — said that he wanted to clear up “FUD” circulated by groups that “see Litecoin as a threat.”
Lee was apparently responding to an explosive report from cryptocurrency hedge fund Multicoin Capital which, among other things, said that litecoin was a “significantly overvalued” and a “relic” from an earlier period of cryptocurrency development.
In the report, which was authored by managing partner Tushar Jain, Multicoin laid out its justification for being short LTC, alleging that the coin faces a number of “negative catalysts” without a sufficient number of bullish factors to offset them.
Specifically, Jain alleged that the cryptocurrency market is maturing and that assets like litecoin that — in his view — do not have compelling use cases will be left out of the next bull rally.
He further argued that litecoin faces severe sell pressure, not only from LTC mining but also from cryptocurrency mining firm Bitmain, who is reportedly sitting on upwards of 1 million LTC while also actively promoting bitcoin cash, a coin that is competing with litecoin to be the cryptocurrency of choice for everyday payments.
Responding to these criticisms and others, Lee argued that, unlike many altcoins, LTC is incredibly secure due to the fact that it is the dominant coin that uses the Scrypt mining algorithm, making it unprofitable for miners to attack the network.
He further said that, far from rendering litecoin obsolete, the advent of second-layer scaling solutions like the Lightning Network (LN) will further support LTC, since they render the coin interoperable with bitcoin.
“Litecoin will always be the cheapest and fastest on ramp to Lightning Network. And with solutions like submarine swaps, you can use on chain LTC to pay for a BTC lightning invoice!” he said. “We will also have decentralized exchanges using atomic swaps. The possibilities are endless”
At present, litecoin is the seventh-largest cryptocurrency with a circulating market cap of $3.2 billion. LTC is trading at $54.75, which represents an 85 percent decline from the coin’s all-time high at $375.29, per data from OnChainFX. Though stark when viewed in isolation, that performance is comparable to the wider large-cap cryptocurrency index, with most major altcoins having experienced peak-to-trough declines ranging from 77 percent to 96 percent.
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Last modified: May 20, 2020 5:59 PM UTC