When Litecoin (LTC 0.98%) launched in 2011 as a fork of Bitcoin‘s (BTC +0.89%) code, it was pitched as digital silver to Bitcoin’s digital gold, with faster block times, lower fees, and a leaner chain designed for everyday payments. For a while, that earned it a loyal following and a spot among the most recognized cryptoassets in the world.
Today, outside of their bones, these two coins don’t seem like they’re very alike whatsoever. Let’s evaluate Litecoin’s investment thesis and determine whether it can outperform its older and bigger brother.
Image source: Getty Images.
The digital silver story doesn’t hold up anymore
Litecoin’s core selling point was its speed, which was a major stumbling block for Bitcoin at the time.
Its 2.5-minute block time was four times faster than Bitcoin’s, and its transaction fees were and are vastly lower. For the prospect of one day processing retail payments at scale, that was a real edge back in 2013. But since then, Bitcoin’s Lightning Network, a layer-2 (L2) protocol enabling near-instant settlement of Bitcoin transactions at a relatively low cost, has neutralized that advantage — not to mention the development of many other, vastly faster and cheaper networks like Solana, which can serve demand even more efficiently.
Today’s Change
(-0.98%) $-0.52
Current Price
$52.77
Key Data Points
Market Cap
$4.1B
Day’s Range
$52.05 – $53.56
52wk Range
$46.75 – $134.88
Volume
204.4M
Beyond payments, Litecoin offers almost nothing today.
It has no smart contract functionality, no decentralized finance (DeFi) ecosystem, and it does nothing to attract developers or investors. Presently, only 32 full-time developers are contributing to its codebase, whereas Bitcoin has close to 1,000 despite also lacking smart contract functionality and a DeFi ecosystem.
In terms of supply, its maximum possible supply of 84 million LTC could technically force a scarcity narrative on paper, but in practice, scarcity without recurring demand is just obscurity.
Today’s Change
(0.89%) $682.60
Current Price
$77307.00
Key Data Points
Market Cap
$1.5T
Day’s Range
$76053.00 – $77329.00
52wk Range
$60255.56 – $126079.89
Volume
24.5B
Don’t bet on a turnaround
If Litecoin launched today with its current feature set, it would attract almost no attention.
Its position in the top 30 cryptocurrencies by market cap (No. 28) reflects the brand recognition it enjoys and the inertia of longtime holders, rather than any fundamental demand. When you consider the factors that make a cryptocurrency valuable, like network effects, institutional adoption, developer activity, and unique technical capabilities, Litecoin comes up quite far short on every count, whereas Bitcoin excels across the board. There isn’t any reason to hold your breath in hopes of a large influx of demand that sends prices up, as there’s nothing to create demand in the first place.
Nonetheless, efforts are underway to develop a layer-2 network that would enable Litecoin to support smart contracts; if everything goes according to plan, it will launch in the second half of this year.Still, there’s an entire universe of more mature blockchains that already offer smart contract support, so it’s unclear why anyone would choose Litecoin’s.
Therefore, for long-term investors choosing between Bitcoin and Litecoin, it’s not a close call. Buy Bitcoin, and don’t buy Litecoin, and sell it if you hold it.