After Multicoin came out with an in-depth report on their rational behind shorting litecoin, Charlie Lee has responded.
Multicoin Capital put out a scathing report on litecoin and why they think it is still vastly overvalued even at the current price of $50-$60.
By the way, if you are not familiar, Multicoin Capital is a cryptocurrency focused hedge fund.
A few days back they came out with a lengthy report detailing all the reasons why they think litecoin is a good short at current prices.
More about that report can be found here:
https://steemit.com/crypto/@jrcornel/crypto-hedge-fund-says-short-litecoin
Why does Multicoin think it is a good short?
I won't go into too many details here as to why they think it makes for a good short, but the cliff-notes version had to do with inferior technology compared to that of the smart contract platforms we have today and a lack of identity going forward.
Litecoin is not as good of a store of value as bitcoin, and it lacks the ability to scale like a Steem or EOS or some other smart contract platform would have the ability to, which also makes them better suited for payments.
For those reasons litecon is left in no-man's land.
Neither being a good store of value nor being a good option for payments going forward.
(Keep in mind that these are the opinions of Multicoin Capital and not necessarily mine)
For more details from the Multicoin report, feel free to click the link posted above.
(Source: https://www.ccn.com/charlie-lee-defends-litecoin-against-fud-from-short-sellers/)
Today, Charlie Lee responds!
You may recall the name Charlie Lee...
He is one of the original creators/founders of litecoin and once owned a very large chunk of litecoin.
However, he recently sold that rather large stake as prices ran up in mid-2017, though he stated the selling was due to a conflict of interest and not due to a loss of belief in the project.
Currently, he has been working full time on development for the litecoin project.
In response to the criticisms from Multicoin, Lee says that unlike many other altcoins, litecoin is incredibly secure due to the fact that it uses the Scrypt mining algorithm, which makes it highly unprofitable to attack the network.
Lee went on to say that instead of technology advancements, such as the lightning network on bitcoin, making litecoin obselete, it will instead help support litecoin.
His reasoning being that it will render the coin interoperable with bitcoin.
His exact wording:
“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”
(Source: https://www.ccn.com/charlie-lee-defends-litecoin-against-fud-from-short-sellers/)
Sounds like there is quite a bit more to litecoin than perhaps Multicoin is giving them credit for!
Who is ultimately right?
It will take a while for things to completely play out, but I have a tough time shorting anything that is already down close to 90% from it's one year high.
Even if they are right and litecoin eventually becomes mostly just a relic or novelty of the past, it still may have a few dead-cat bounces in it before it ultimately fades away.
Litecoin has name recognition and it has a devoted community of developers which means it probably isn't going away in the very near future.
Longer term, Multicoin may turn out to be right, but for now, I think betting on Lee makes for the better bet.
Stay informed my friends.
Image Source:
https://ethereumworldnews.com/gemini-announces-litecoin-ltc-support/
Follow me: @jrcornel
Litecoin is fantastic. I am sorry to see the shorts are going after them.
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Yea they may be signalling a bottom. Even institutions sometimes fall victim to emotional trading. Shorting anything down 90% year to date is a tough call.
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I also bet on the Litecoin community which has come a long way and have been developing innovative approaches to cryptocurrencies for some time now. They developed and implemented the SegWit technology before bitcoin and also started with lightning before them as well. I think Litecoin will remain the silver to bitcoin’s gold.
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That thought is shared by many in the crypto community. If people keep using the coin, it will continue to have value. I think Multicoin was underestimating the value of the litecoin community.
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True I havent followed litecoin in detail but segwit did happen on litecoin first and it works wonderfully
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Wow 😮 myhead is spinning; glad I don’t have to learn all this, not long and will not short LTC.
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I would rather own bitcoin than litecoin personally, but that is just me.
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What a lot of these speculators and reviewers don't understand is that the application of a crypto is secondary to it's community. Litecoin is always going to have a community, so it will always have value.
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Yea I agree that the community will give it some value, the question is what that value is?! Most of the value in all of these cryptocurrencies currently is speculative value, and as we have seen, when the herd turns, it often turns hard!
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Yeah, people don't know how badly they are being exploited by their fiat currency. Maybe they never will. Sometimes I think it's not so much speculation as it is a bet on when people will wake up from their ignorant stupor. (or when the unsustainable world economy starts collapsing.)
When you think about it that way, that there are 180 fiat currencies worse than Litecoin, I think it can bring in some new perspective. Although I'm not one to talk because I liquidated all my Litecoin and put it in to Ethereum and Steem for many of the same reasons given.
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Shorting at $400 makes sense, but not at $50 in my opinion
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Yep, exactly. Shorting something down 90% in the same year is a bit scary.
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I think that's a very dangerous bet. Now, I agree that certain other coins are a better investment right now, with practically everything being down, but that doesn't mean that Litecoin is a target for a short. Litecoin is actually one of the best cryptos to use to actually buy things because practically everyone accepts it that accepts crypto. If they accept anything other than Bitcoin, they probably accept Litecoin. For that reason alone, if you have a few extra bucks, I don't think it's a bad investment to have a few coins around to use for actually buying things. That's not the same as saying it's a good investment though.
Of course, you could say the same about Dogecoin. It's accepted by almost as many places as Litecoin. If you had bought some Dogecoin when it was really down, just to have some around for buying stuff with, you'd be sitting pretty, since it recently spiked.
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Correct. For me personally, if I am buying any of the legacy coins I will stick with bitcoin. Litecoin might have a place, but why buy silver when I can buy gold instead? If I am going purely after speculation I'll go with a smart contract platform token.
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Well, if you like silver. :P
I think most coins have their place. Bitcoin is a good store of value. Litecoin is a good coin for money transfer.
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For now, but there are already coins that work better for money transfers/transactions currently, and they are likely only going to keep getting better.
Though if the lightning network eventually does what it is supposed to, that will also be implemented on litecoin, so there is that.
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Oh yeah, there are tons that work better for money transfer. Steem even works better. But Steem isn't accepted at most places. You have to check what the place accepts, then possibly exchange what crypto you have to that currency. In that process, they almost always accept Litecoin. Of course, they also often accept a few others, like BCC, or BTC. Of course, every time I've tried to pay with BTC in the last year, the fee has been insane, and the speed slow. BCC's alright though. Even Doge was good when I used it. It's very similar to Litecoin though.
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That is a very good point. It doesn't matter if a coin works better if it is not accepted anywhere. :)
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Everybody has an opinion :) Statis report was quite positive on litecoin ... will see how this will play out
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Haha yep, there you go. And you know what they say about opinions... they are like a certain part of the anatomy. Everyone has one and they usually stink!
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Yea that is what I ment :)
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Meh, the original points still stand for mine.
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So, you are still in the short camp?
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More so that it isn’t in any of my own long term investments. I just don’t see a use case for Litecoin going forward.
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You and me both. I have been saying that about litecoin for some time now. It isn't the best at anything and I find it hard to believe it will continue to be worth billions in the future. I just don't know when the future meets reality, meaning that prices might stay elevated some time due to speculation before fundamentals really start to matter on these things. It could go a lot higher before reality sets in, but like you, I hold no positions either way in litecoin.
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Not so soon. There are too many factors to put into consideration to judge a coin's value. Technology is just another one and often may nkt be the deciding factor.
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Most of the valuation currently has to do with speculation. Once that eventually dries up we will see where the fundamentals say these coins should be valued.
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Very interesting
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What is halving in the litecoin that was much hyped up earlier
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Coins mentioned in post:
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