The cryptocurrency litecoin (LTC) is often referred to as the silver to bitcoin’s gold. This year, litecoin investors would have been better off staying in the analog world: While bitcoin (BTC) has gained twice as much as gold, litecoin has only recently caught up with silver.
Some investors now foresee a rally developing in litecoin prices, with a key upgrade looming and signs that activity is increasing on the blockchain network.
The upgrade is to add a “privacy protocol” known as Mimblewimble, which is supposed to help shield the identities of holders of senders and recipients of litecoin tokens while also improving the network’s processing capacity. A testnet of Mimblewimble, in the works for almost a year, is targeted for implementation by the end of September.
And based on market data, it appears the looming addition is generating enthusiasm among users: Daily confirmed transactions on litecoin’s blockchain has more than doubled this year, reaching a 7-day average of 48,948 last week, the highest since February 2018, according to data source Glassnode.
Litecoin backers hope the token’s added privacy features from the Mimblewimble upgrade will help attract users who otherwise might gravitate toward existing privacy coins like monero (XMR) and zcash (ZEC). Those tokens come with their own risks, such as the potential for holders to get diluted by new issuance.
The speculation is the upgrade could help litecoin, which has gained about 50% this year to $63, catch up with bitcoin’s 64% increase.
“Litecoin’s upcoming Mimblewimble upgrade has led to a spike in transactions and active addresses,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index futures.
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Bitcoin Watch
Bitcoin price chart (TradingView)
Although bitcoin appears stuck in a narrowing price range, investor interest in futures on the Chicago Mercantile Exchange (CME), a sign of increased institutional demand, continues to grow.
Open interest on the CME, or the number of outstanding contracts, rose to a fresh record high of $864 million on Friday, topping last week’s record of $841 million, according to data source Skew. The CME has recently climbed in the ranks to become the third-largest bitcoin futures exchange by open interest.
Growth in futures trading volume, however, has stalled over the past two weeks, which might actually be bullish: A combination of rising open interest and low volumes usually indicates investors are holding on to their positions. Typically when that happens, the market continues its prior trajectory, which in this case was up.
So bitcoin could break out of the current price-consolidation pattern, represented by an ascending triangle on the daily chart, with a convincing move above $12,000. That breakout, if confirmed, would imply a continuation of the rally from July lows below $9,000 and open the doors for stronger gains. At press time, bitcoin is changing hands at $11,870 on major exchanges
From your post “privacy protocol” known as Mimblewimble, which is supposed to help shield the identities of holders of senders and recipients of litecoin tokens. Good in the sence of privacy, but it will become haven for criminals. This is the main reason for failure of Monitisation in India. Do you remember that time.