When we hit the extremes in the cryptocurrency market, people’s minds go into overdrive, about what the future value of their coins will be. When things bottom out, people wonder if it’ll go lower. They panic, that they missed their opportunity to sell. When the market enters a bull run up, they start dreaming about how high the price will reach…whether it is likely or not. With Litecoin, that dream number seems to start at $1000 per LTC, and extends even higher from there. But will 1 LTC ever be worth $1000?
Why Does Litecoin Need to be Worth $1000?
Alrighty, to answer the question of can LTC ever reach $1000 in value per coin, it is yes.
Will it? The answer is, who knows?
I mean, during the last super bull market of late 2017, there were plenty of folks saying it’d be worth $1000 sometime in 2018. It didn’t do that. The market peaked somewhere in the $320 range, I believe. In fact, it tanked all the way to around $30 for 1 LTC. Hell, it could go back to near zero sometime in the future.
Nobody truly knows where it’s going. Some have a thesis about what it’ll do and it might come to fruition. Out of thousands of people, a certain percentage will be correct about their predictions.
The thing is, you don’t need to be absolutely correct, in order to make money. If 1 LTC were worth $700 tomorrow, would you sell it? Or would you be scared to take any profit, because it isn’t the ‘magic’ $1000 number.
Secondly, even if you’re a LTC bull and think it will hit $1000, what’s the time frame? Will it hit that number in 2019? 2020? What if it takes until 2030?
Again, what is the significance of the $1000?
If you believe that hyperinflation is going to occur with the dollar (sometime in the future…but again, when? Being off by five years, can make a huge difference), that $1000 LTC, might be the current equivalent of $1. Though, I suppose we can talk about $1000 in current purchasing power per Litecoin, and its equivalent future price.
Why Could it Get to $1000 per LTC?
Well, the bull case for Litecoin, is the continued growing adoption of it as a crypto that people are actually using to make transactions. There are lots of businesses now, which accept both Bitcoin and Litecoin, as payment. It has a 7 year history and advantage of name recognition and this is potentially huge.
Some folks say, Bitcoin is the store of value, and LTC is the one you spend. There will only be 4x more Litecoin ever mined versus the total number of Bitcoin. If wider acceptance, sort of tethers these two to one another, a massive increase in value could occur.
With greater institutional investment and recognition of cryptocurrencies, Bitcoin has especially gained a lot of legitimacy over the past few years. As it becomes more scarce, the price should rise even further, potentially dragging up other coins with it. Even if LTC, isn’t widely adopted in the long run, it could still get a short-run parabolic run.
Just like the bull run of 2017, the euphoria surrounding BTC, spilled over to just about every other coin on the market. People didn’t want to miss out, so they bought anything they could get. This factor alone, could drag LTC up to a price close to $1000, if Bitcoin surpasses its previous high. Mania levels of buying can happen, will it? Again, who knows?
LTC is currently trading at around $125, as I’m writing this. It isn’t inconceivable for an 8x return from these price levels, if markets get super frothy.
What’s Your Investment Thesis? Get to the ‘Why’ of Buying LTC
I own Litecoin. I’ve owned other LTC, in the past. I’ve traded it at a profit. I’m utterly agnostic to its long-term adoption, as a currency. That’s my personal stance. I don’t particularly care. I will buy Litecoin, particularly when its price, drops like a rock. Trade some for profit in US dollars. Keep the rest as a potential lotto ticket (if the price goes to the moon!) or hedge against some terrible economic times.
In short, I want to increase my purchasing power, in whatever denomination is in use at the time. Right now, that’s dollars. The goal of all of my investments is to either increase or preserve purchasing power. That’s it.
If cryptocurrency, is an avenue to do that. Then, I’m all aboard. If some company’s stock seems cheap based on an actual valuation, I’ll buy that too. Real estate? Sure thing.
So, if my LTC is worth significantly more in dollars than it was when I acquired it, I will probably sell some of it for cash. Cash which I will either use to buy something or acquire other asset class stakes (stocks, bonds, gold, silver, real estate, whatever).
The rest of it? I’ll let it ride longer, in hopes that it will go parabolic, and increase my purchasing power further.
If it goes to zero, I don’t give a shit.
It’d be less than desirable, but since I’ve already taken profits in the past, I’d still be ahead no matter what. Also, like any other asset class, I never get overzealous and purchase more than I can comfortably afford to lose. A complete wipeout, won’t destroy my life.
What is the investment thesis for you?
Are you using USD or euro or whatever your local currency is to buy LTC, because you believe in its future? Or is it pure speculation?
If you truly believe in it as a future form of widely adopted money, shouldn’t you be transacting in it now, to make that happen? At least a portion of it? Who cares what the price is in USD, then, outside of how much stuff you can buy with the Litecoin?
Is it a long-term store of value?
Is it just speculation and you’ll dump it all, if it hits a certain price?
If there is a run up that gets it above $500 per LTC, what will you do? Sell off fractions to lock in profit or keep going for that $1000 price target? Whatever your decision, figure out why that is, and what the pros and cons of each decision is.
If it went to $.001 per LTC, would this drastically effect your standard of living? If so, why are you carrying so much risk, on one trade? All eggs, one basket.
You need to have a reason why you’re buying Litecoin. Figuring all of this out, gives you a roadmap of how to behave, during the extreme times of market pricing (both low and high).
Bulls vs. No Coins or a Third Way?
I know that a lot of people who are getting into buying cryptos are young and have never invested in anything before. With this inexperience, comes certain pitfalls, namely getting to caught up in the hype.
People will often set out, just to make money. Then, get attached to an idea or certain asset, and end up just wanting to be proven correct about their beliefs.
This happens in every damn asset class!
I’ve seen people get attached to certain companies, whose stock they hold. It happens with gold. It happens with crypto. They put on blinders to the reality of a given situation, and it can end up, really biting them later.
For cryptocurrencies, such as Litecoin, there are the true believers and the no coin folks. They are hardliners about crypto, either for or against.
Winners Who Won’t Take the W
For example, during the 2017 run up in LTC price, there were people working minimum wage (or near it) jobs sitting on 5-6 figure LTC gains! They would post about it on Reddit or other boards, talking about crypto. That’s really great, except that, they refused to sell any.
These people became true believers. Maybe they all do become mega rich, at some point (assuming they even decide to sell at $1000+ per LTC). I hope they do, that’d be cool as fuck.
But when you can barely survive, you’re making $15-20K a year, and don’t take any profits off the table? That’s absurd. At that point, you’ve already won, enjoy some of the spoils. Sell some and get your life situation in a better spot. Want to let the rest ride? Go for it, but to have no money and watch that $320 Litecoin price drop to $30 in a year’s time? That’s nuts.
They could’ve had 2-3 years worth of wages, in their bank accounts, within a short period of time. Plus, still been sitting on a stash of Litecoin, to potentially send their profits into orbit. Immediately, their life is improved.
On the opposite end of the spectrum, there is the No Coin folks, who won’t ever buy any cryptocurrency. These people, endlessly talk about Beanie Babies, tulip bulbs, and other financial bubbles. Making the connection to crypto.
I’m not even saying they’re necessarily wrong. Again, I’m agnostic to widespread crypto adoption, but why be so rigid with something with a decent shot at paying off massively?
(Side note: I love their Beanie Baby example. As if you could’ve sold fractions of a stuffed toy on the way up in its perceived value, like with crypto. Or there was a liquid marketplace to sell, like with crypto (not just 1990s eBay). Nope…had to sell the whole toy at once and hope you got a good price at auction for it, close to book value. Meanwhile, you can realize 10x returns with crypto. Pull out a bunch of profits and still have more upside in the future…without having to risk much)
Yet, even understanding the mania which comes along with huge market run ups, they still won’t put any money in. “Oh, it’ll go to zero. Just you watch.”
Yeah, maybe, but over the last decade of boom and bust cycles of Bitcoin…even a tiny amount would’ve still made a boatload. Why not put in an amount, you wouldn’t care if you lost? An amount that would make no real difference in your standard of living?
If it went to zero, who cares? It was an insignificant amount to you. If it does go parabolic, congrats. You’ve now got a lot of cash to invest into other assets that you actually believe in.
Nope. They still won’t do it, they’d rather be proven correct at some point in the future; versus making easy money now, with very little downside risk (in terms of its impact on your well-being).
You Don’t Need to Be 100% Correct to Make Money
A lot of people look at price charts in any asset class, and do this thing where they say, “Oh if I had bought it at x price and sold it at the top…I’d be a hyper super mega billionaire!” (Or some equivalent).
I’ve done another post on this site, where I do a case study of investing in stock during a bust oil market, and how even if you’re not always consistent you can come out ahead. Even if you buy a portion at too high a price, you can still eventually get great returns. (The returns since publishing are even better, than what is written there).
Yes, that’s investing in a company that you can properly valuate, and is way less speculative versus crypto. However, it still shows that even without buying at the bottom or predicting the top, one can do very well. Especially in a market like coins, where the price surges can be insanely lucrative.
Don’t fall into the trap of fantasizing of what you could’ve had. You didn’t invest then or you sold early or whatever. It doesn’t matter. You can still come out ahead, way ahead.
Kill the Greed Impulse
Piggybacking off of that last point, envisioning being wealthy is cool, but don’t get attached to a future that may never come to pass.
Yes, some people have already become millionaires or billionaires, in the past decade off of this stuff. That’s indeed amazing. But, it doesn’t mean it’ll happen for you. I hope we all Moon Lambo it, though.
What if, you end up with high five figures or six figures in profits? Not millions, but still greatly enhances one’s life. That amount of money, may not set you free financially, but it definitely shortens the time frame.
Hell, even a few hundred dollars is still better than nothing.
Invest. Make money. But don’t get carried away. Don’t overextend yourself, buying up coins you really can’t afford to, without losing the rent money.
Most importantly, don’t obsess about it. It’ll just make you stressed out and depressed, that the easy life hasn’t shown up for you yet. Maybe it never does. That’s okay. Again, not ideal, but it’s fine.
If you’re going to dollar cost average in, do so. Keep at it and let Litecoin do its thing. During extreme pull backs, buy a little more, if you have the cash. Just don’t panic and let it absorb your life, whether we go to $1000, or back to $1.