Litecoin took cryptocurrency markets by storm over the last few days. Its price tripled in 4 days and it is now clearly above the $300 USD mark. This might be due to expectations surrounding the Lighting Network, or it might just be Litecoin catching up after Bitcoin soared last week. In a panel on CNBC, Michael Novogratz said that Litecoin soared above $300 due in part to Bitcoin users buying LTC with their recent gains to keep their funds within the cryptocurrency ecosystem and avoid taxes. Nevertheless, Litecoin does have a history of sharp drops after rising sharply, so Novogratz also warned viewers about that possibility. Charlie Lee – the creator of Litecoin – concurred, launching his own warning on Twitter.
Tongue in Cheek Warning from Charlie Lee as Litecoin Soared Above $300
Charlie Lee’s was more tongue in cheek than Novogratz’s. In an unusual tweet, Lee warned buyers as Litecoin soared above $300, that the cryptocurrency has seen sharp drops before, and no one should buy if they are not willing to take the risk of a potential drop. Although it is hard to assess Lee’s tone on that tweet, there is an element of sarcasm in it, given that his decision to move back to the project full time earlier this year, might be one of the reasons why Litecoin is experiencing this kind of growth.
As Litecoin Soared Above $300, Cryptocurrency Markets Soared to Half a Trillion in Valuation
Nevertheless, as Litecoin soared above $300 USD, it is important to consider the ‘macro’ picture. Litecoin was poised to rise for various reasons during the year, but looking at cryptocurrency markets as a whole, the sheer amount of fiat moving in also influenced this recent run. Cryptocurrency markets are now worth half a trillion USD. It seems that the money flooding into these markets recently has been more evenly distributed among altcoins. Ether also experienced a steep rise over the last few days, and so did Dash and Ripple. Within this context, Litecoin’s recent rise shouldn’t be taken as something especially extraordinary.
Back to Charlie Lee’s Tweet
This ‘macro’ view brings us back to Charlie Lee’s tweet, warning people not to buy if they can’t bear the risk of a potential fall. With more fiat moving into the markets, solid cryptocurrencies that are well established will rise. Litecoin soared above $300 USD partly because it is one of the most solid coins in the market, making it the kind of cryptocurrency that would grab the attention of newly minted cryptocurrency holders. This ‘macro’ picture however also sends a warning to investors. When markets rise a s steeply as this in such a short period of time, investors are more likely to sell to take profits. That is exactly what Novogratz did, so anyone looking at Litecoin right now should keep that in mind.