Disclaimer: The information in this blog represents the opinions of its author and is for educational purposes only. It is not intended as investment advice. Cryptocurrency markets are extremely risky so you should only invest money you are willing to lose.
Triumvirate Of The Crypto-Verse
Bitcoin is the crypto-juggernaut - an astonishingly profitable speculative investment and store of value that's also being treated more and more like digital gold. Litecoin is the fast, cheap, high-volume, micro-transaction crypto that answers the eternal question "but can I buy a cup of coffee with it?". Ethereum is the build-your-own-blockchain cryptocurrency that packs the potential for an abundance of as-yet-unimagined applications extending into every vertical you can name.
Together they form the triumvirate of the crypto-verse, and they're all on a tear - What's up with that?
Bitcoin is the red-pill, the gateway drug to the cryptocurrency ecosystem, and in an astonishingly short time it has emerged from the shadows of the dark web and gone mainstream as a store of value, a digital currency, and a revolutionary new asset class which some see as the speculative investment opportunity of a lifetime.
No Turning Back
When grandma is buying it on her iPhone and the kids are investing their bar-mitzvah money - there's no question that it's gone mainstream and there's no turning back. As any 9-year-old can tell you, cryptocurrency is the future, and the future is here.
When the Chicago Merc begins trading bitcoin, it will become part of the $20-trillion-a-day futures markets, and every trader on the planet will have an on-ramp to the cryptocurrency space.
Who knows if the money flow from institutions will be bigger than all that money from my barber, my mailman, grandma, and the bar-mitzvah boys, who are all tripping over themselves to open coinbase accounts. Coinbase reports an average of 100,000 new wallets a day.
One thing is for certain though - some of that money will diffuse into other cryptocurrencies, and a significant percentage of it will stay in the crypto-verse and never see a dollar sign again.
Down The Rabbit Hole
That's what's happening in the cryptocurrency ecosystem right now, as bitcoin, ethereum, and litecoin are all on a tear. Chart analysis of all 3 show major uptrends carrying powerful momentum as the money flows into and filters and diffuses throughout the crypto space.
Investors were begging their brokers to get them into bitcoin, and after several failed attempts at ETFs, the Chicago Merc took the initiative to develop a futures contract, and the CBOE and Nasdaq both followed suit.
The exchanges helped investors overcome their crypto-phobia, and they're now tripping over themselves to dive in.
Lo and Behold - They Didn't Spontaneously Combust
Those who didn't want to deal with the hassles of the tech, enigmatic wallets, bank clearance delays, and no-name exchanges, now have easy access through an exchange they know they can trust. They've tried cryptocurrencies and, lo and behold, they didn't spontaneously combust. In fact, many of them made money.
So now they're ready to expand their horizons and start researching altcoins. This is why the other major players, the speedy micro-transaction and build-your-own-blockchain cryptocurrencies are both showing signs of resuming strong uptrends with money flow indicators revealing powerful underlying momentum.
The Build-Your-Own-Blockchain Cryptocurrency
Ethereum (it's actually called "ether") is the native cryptocurrency that powers the ethereum network - one that allows anyone to build their own blockchain. Self-verifying data is only part of the magic of blockchain. The ethereum network is also designed to facilitate the creation of smart contracts which, like robot lawyers, can automatically execute the terms of complex agreements when specific conditions are met.
The highest value blockchain and smart contract applications have yet to be imagined and developed, so there is plenty of room on the upside for the #2 cryptocurrency, whose market capitalization now stands at $66 Billion.
The Speedy Micro-Transaction Cryptocurrency
Litecoin was built from the ground up for small, high-frequency transactions with fast confirmation times.
Litecoin, founded by Charlie Lee, an MIT graduate and former Google engineer, is built on a blockchain that processes a block about every 2.5 minutes, compared to bitcoin's 10 minute delay (a significant backlog on the bitcoin network may increase the delay to several hours).
Its blockchain uses the Scrypt protocol, which precludes the possibility of mining supercomputers switching over from bitcoin to litecoin. This essentially reserves mining for the little guy and maintains decentralization.
Litecoin also has bigger blocks than bitcoin, and 4 times more coins in circulation (84 million vs. bitcoin's 21 million).
Off The Chain
What really sets litecoin apart is its early embrace and smooth integration of the available technology for off-chain transactions.
You might have heard about the big kerfuffle in the bitcoin community over SegWit, a kind of data compression that separates digital signatures from transactions, freeing up block space. Bitcoin split over this disagreement, into bitcoin and bitcoin cash. Litecoin, on the other hand, was an early adopter of SegWit, easing strain on the blockchain and speeding up transaction and confirmation times.
Dominant Global Borderless Currency
Since litecoin excels at the one thing it was designed to do best - small, fast, inexpensive, high-frequency transactions - it may be the most undervalued cryptocurrency out there, with much more potential on the upside. Technical chart analysis and momentum indicators show that litecoin is just beginning a powerful uptrend and retracement zones are great opportunities to invest in what may become the dominant global borderless currency for everyday transactions.