It is time to begin on the lookout for an ignored or undervalued cryptocurrency with the potential for a breakout rally in 2025. In a best-case state of affairs, this ought to be a cryptocurrency buying and selling effectively under its all-time excessive and with a compelling investment thesis for the yr forward. It also needs to have a confirmed monitor report of explosive upward strikes.
One cryptocurrency that meets all three of those standards is Litecoin (LTC 1.17%). Whereas Litecoin could also be up solely 42% this yr, it may have a rather more spectacular efficiency in 2025. This is why.
“Digital silver”
As its title suggests, Litecoin is a “lite” model of Bitcoin (BTC 0.38%). It launched again in 2011, utilizing a lot of the identical laptop supply code used to create Bitcoin. As a end result, Litecoin shares lots of the similar underlying traits as Bitcoin. For instance, it’s mined similar to Bitcoin, has a halving occasion each 4 years similar to Bitcoin, and has a comparatively small circulating coin provide, giving it almost the identical sort of shortage as Bitcoin.
Litecoin’s creators envisioned it as a quicker, cheaper, and extra environment friendly model of Bitcoin. If Bitcoin is “digital gold,” then Litecoin is “digital silver.” Whereas Litecoin has misplaced a few of its luster over the previous decade, it stays one of many 25 largest cryptocurrencies in the world, with a almost $8 billion market cap.
The spot ETF funding thesis
All these traits of Litecoin are particularly necessary now as we head into 2025. That is as a result of Litecoin is usually considered as significantly much less dangerous than different, extra speculative cryptocurrencies. Similar to Bitcoin, Litecoin is taken into account a commodity and never a security. Theoretically, that makes it a lot simpler for regulators to approve new merchandise linked to Litecoin.
Picture supply: Getty Photographs.
In truth, the rising consensus now’s that Litecoin would be the subsequent cryptocurrency to get a spot exchange-traded fund (ETF). As Bloomberg highlighted earlier this month, a number of different prime cryptocurrencies typically talked about as potential spot ETF candidates — corresponding to XRP and Solana — should carry an excessive amount of regulatory threat. In distinction, Litecoin is principally free and away from any regulatory issues and has a a lot clearer path to Securities and Change Fee (SEC) approval.
Again in October, crypto funding agency Canary Capital filed with the SEC for a spot Litecoin ETF, and the worth of Litecoin spiked by 10%. Given all of the pro-crypto optimism surrounding the Trump administration, we may probably see a spot Litecoin ETF approval by mid-2025, if not sooner. In that case, that might ship the worth of Litecoin hovering. This is similar sample we noticed with the launch of the brand new spot Bitcoin ETFs.
Does Litecoin have breakout potential?
The large query, in fact, is simply how a lot breakout potential Litecoin may need. The coin at the moment trades round $100, greater than 75% under its all-time excessive of $412. That is necessary as a result of different prime cryptocurrencies (corresponding to Bitcoin) are both setting new all-time highs or near hitting their all-time highs. Litecoin seems to have rather more room to run.
It is fascinating to take into consideration what occurred with Litecoin through the earlier crypto bull market rally again in 2020-2021. In October 2020, Litecoin was buying and selling at round $50 and wasn’t attracting a lot of consideration from buyers. Inside a span of seven months, nonetheless, Litecoin zoomed previous the $400 mark in Might 2021. Litecoin had a comparable run in 2017 when it additionally hit $400. So, we all know Litecoin undoubtedly has explosive upside potential.
Can Litecoin ship an encore efficiency in 2025? To reply that query, it is helpful to contemplate the correlation between Bitcoin and Litecoin. Over the previous yr, the correlation between the 2 is a strong 0.75. The one different main altcoin with a considerably greater correlation over that point is Ethereum, which has a 0.89 correlation with Bitcoin.
That tells me that Litecoin has a comparatively excessive likelihood of monitoring any upward strikes made by Bitcoin over the following 12 months. In the event you suppose Bitcoin will explode in worth subsequent yr, Litecoin may go alongside for the experience.
Before you purchase Litecoin, learn this
Simply hold in thoughts that there is a purpose Litecoin is buying and selling 75% under its all-time excessive. There’s a purpose it has dropped out of the listing of the highest 20 cryptocurrencies by market cap. And there is a purpose Litecoin has considerably underperformed Bitcoin this yr. It may merely be the case that Litecoin’s finest days are already behind it.
That mentioned, it is at all times thrilling to find an ignored gem or to seek out a probably wildly undervalued investment. If the SEC approves a spot Litecoin ETF subsequent yr, Litecoin may turn into the primary breakout cryptocurrency of 2025.
