The cryptocurrency ecosystem is always an environment for hot topics. So when popular crypto trader and investor “CryptoDonAlt” took to Twitter to open the floor for a conversation centering Litecoin’s performance over the years, the community responded in excitement as many dropped their two cents; some of which are objectively thought-provoking.
Has Litecoin reached peak?
Litecoin, as observed by the investor, has been underperforming amongst its peers over the years. A chart showing the four years performance timeline of the altcoin reveals that against Bitcoin and Ethereum, the altcoin has dipped greatly.
In terms of price performance, Litecoin (LTC) lost 70% of its value in May after hitting an all-time high of $413.91 to $133 at press time. What was once valued at $27 billion in market valuation, has now dropped to $9 billion at press time.
Seeing as the altcoin was created in 2011 —long before a lot of other assets that are currently dominating the market were created—the investor’s question; “Why do you think Litecoin fell out of favor? Expanding on that thought, why can’t whatever happened to Litecoin happen to your favorite altcoin?” is one that many have been asking.
Why did Litecoin fall off?
A similar sentiment is being shared by a handful of community members as regards the reason behind Litecoin’s underperformance; Charlie Lee’s Litecoin sale in 2017.
Back in 2017, Charlie Lee dropped a bomb on the community, when he revealed that he had sold his Litecoin holdings at an average price of $205.
The market as expected didn’t respond quite well to the revelation, as it seemed like a situation of a founder giving up on his own project, which could have swayed a lot of selling decisions during that period. Lee added that he would donate the rest in the future, and continue to work on the Litecoin project regardless, But community members are still not convinced that the project has sustained any major growth since 2017.
“It isn’t used for anything – close to zero economic activity, no network effects, pointless. Its core purpose is served better by bitcoin and its spot as #2 was replaced by ethereum.” wrote one popular trader.
How long can Altcoins last before they fall off?
On the bigger spectrum, the conversations have created room for a bigger debate, on the expected lifespan of altcoins in the market, as these assets have a long history of falling off the track after some years. The market cup usually diminishes greatly, as trading volume drops, hinting that the asset has little to no use case in the current market.
For DonAlt, altcoins are just temporary and will continue to be replaced by other newcomers.
In his words;
“I think altcoins are always going to come and go as soon as better competitors come around but wondering what you guys think.”
However, with the likes of Ethereum, and the DeFi coins taking over the market, the narrative could change in the long term.