ForexMinute.com – With Bitcoin price charts once again drifting from being moderate to bearish, Litecoin too is facing the similar drops in its own market cap and prices. For obvious reasons, the speculation about Litecoin losing its charm as the second-best cryptocurrency resurfaced and its market was once again accused of being tied to Bitcoin.
And indeed it is, accepted The Real Mage. Soon after the silver coin’s notable fall hit the wire, the renowned Litecoin moderator took LitecoinTalk.ORG and Reddit to convey a sarcastic yet an important message on Litecoin’s much-talked about liquidity. Titled “Do you know what your coins really worth”, the article wonderfully drove readers to some really insightful information on how the cryptocurrency market actually works, while defending Litecoin from any sort of FUD.
The Real Mage first addresses the traders who constantly contact him to better understand the Litecoin’s consistent drop from months. The moderator however turns all of them down by committing to be an oblivious soul. “I’m honestly not sure” he says. “The problem with this is that with all the data analysis that is done is traditionally done with historical information. When an outlier happens (an unusual event), the data is less predictable. This is a one-time event (ASICs coming out), so all the price analysis is subjective at this point.”
The article becomes interesting when The Real Mage took a dig on its own coin first to make people understand the complexity at which it is traded. He somewhat rubbishes the idea of liquidity, while seems more open towards explaining the role of demand and supply in a cryptocurrency market. This concept subsequently shifts to adaption, which somewhat plays a central role in deciding supply against demand.
The Real Mage however never says it directly, but somewhat hints that Litecoin is nothing but a victim of low adaption rate, especially when its counterpart Bitcoin is gradually expanding its economy by being accepted at the world’s major retailers. He then overcomes the drama by speaking rationally about the risks Bitcoin possess by such an adaption rate. According to him, and many other experts, it is Bitcoin which, in true sense, is being liquidated by the virtue of increasing adaption. He states:
“I think it’s fantastic that Overstock, Newegg, Expedia, and so on is accepting Bitcoins. But the sad truth of the matter is that these companies are not helping with demand (overstock is a tiny bit). Coinbase adoption is a double edged sword, one that both hurts and helps. It helps getting companies to accept Bitcoin, but it hurts because of the nature of Coinbase, it’s a liquidity entity. The entire purpose is to liquefy Bitcoins for companies, reselling them back on the market.”
The Real Mage thinks that the Litecoin community is lucky to have been away from such practices. According to him, the only way to improve Litecoin’s condition is by stabilizing it for extensive periods. Indeed, it is not just enough supplies to demands that adds more value to coin. Sometime, supply needs to cut itself down in order to maintain the low demands. In both cases, a coin moves upward.
So what now is expected from Litecoin users is not to dwell with market sentiment and contribute towards forming a Litecoin economy of its own, minus sell-offs. It is after all a currency in the end.
To contact the reporter of the story: Yashu Gola at email@example.com
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