Summary:
Litecoin (LTC) could be undervalued and has breakout potential for 2025.
Trading around $100, it's 75% below its all-time high of $412.
Growing consensus suggests Litecoin may be the next to gain a spot ETF.
Historically, Litecoin has shown explosive upside potential during bull markets.
Correlation with Bitcoin indicates a high probability of tracking upward moves.
It's time to start looking for an overlooked or undervalued cryptocurrency with the potential for a breakout rally in 2025. In a best-case scenario, this cryptocurrency should be trading well below its all-time high and possess a compelling investment thesis for the year ahead. It should also have a proven track record of explosive upward moves.
Litecoin: The Digital Silver
One cryptocurrency that meets all these criteria is Litecoin (LTC). While Litecoin may only be up 42% this year, it could have a much more impressive performance in 2025.
As its name suggests, Litecoin is a 'lite' version of Bitcoin (BTC), having launched back in 2011. It shares many underlying characteristics with Bitcoin, such as being mined similarly and having a halving event every four years, which contributes to its scarcity. Litecoin's creators envisioned it as a faster, cheaper, and more efficient alternative to Bitcoin. Despite losing some luster over the past decade, it remains one of the 25 largest cryptocurrencies in the world, with a nearly $8 billion market cap.
The Spot ETF Investment Thesis
As we approach 2025, the characteristics of Litecoin become particularly significant. Litecoin is often viewed as less risky than more speculative cryptocurrencies. Like Bitcoin, it is considered a commodity rather than a security, potentially making it easier for regulators to approve new products linked to it.
In fact, there is a growing consensus that Litecoin could be the next cryptocurrency to gain a spot exchange-traded fund (ETF). Unlike other top cryptocurrencies like XRP and Solana, which face regulatory risks, Litecoin is relatively free from such concerns, paving a clearer path for SEC approval.
In October, crypto investment firm Canary Capital filed with the SEC for a spot Litecoin ETF, causing its price to spike by 10%. With the pro-crypto sentiment surrounding the Trump administration, there's potential for ETF approval by mid-2025, which could send Litecoin's price soaring, similar to the launch of spot Bitcoin ETFs.
Does Litecoin Have Breakout Potential?
Currently trading around $100, Litecoin is more than 75% below its all-time high of $412. This situation is crucial as other top cryptocurrencies are either setting new highs or nearing their peak. Litecoin appears to have much more room to run.
Historically, during the last crypto bull market, Litecoin traded at around $50 in October 2020 and surged past $400 in May 2021, showcasing its explosive upside potential. The correlation between Litecoin and Bitcoin is significant, with a robust correlation of 0.75 over the past year, indicating that Litecoin is likely to follow Bitcoin's upward movements.
Before You Buy Litecoin, Read This
However, it's essential to note that Litecoin is trading 75% below its all-time high for a reason. It has dropped out of the top 20 cryptocurrencies by market cap and has underperformed Bitcoin this year. While it may be tempting to invest in an undervalued asset, it's crucial to consider the risks. If the SEC approves a spot Litecoin ETF next year, it could indeed become the first breakout cryptocurrency of 2025.
Image source: Getty Images.
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