Major Crypto Hedge Fund Slams Litecoin, Calling the Altcoin a ‘Relic’
Not everyone is sold on the future outlook of Litecoin (LTC), the cryptocurrency often considered the silver to Bitcoin’s gold, and some hedge funds have even gone as far as shorting the altcoin near 52-week lows.
In a recent report published by Multicoin Capital, a sizeable crypto hedge fund backed by notable VC Fred Wilson with $75 million AUM, the firm calls Litecoin a “relic of the pre-smart contract platform crypto ecosystem.”
Multicoin goes on to break down multiple factors making up the firm’s bearish thesis, including the increasing usability of Bitcoin, the lack of a differentiated roadmap, and questionable development activity through 2018.
The firm also notes that Litecoin benefited greatly from being the lowest price-per-unit coin on Coinbase for an extended period, given that amateur retail investors often purchase based on price and not market capitalization. Since Coinbase is moving towards a more aggressive listing schedule, Multicoin sees Litecoin suffering.
The Litecoin Foundation, which oversees the development of Litecoin and its ecosystem, held roughly $322,000 in total assets as of May 31. Notably, the majority of these assets are in Litecoin itself and only 1.2% in cash. Meaning, if the price of Litecoin were to drop significantly, the digital currency’s foundation could struggle to stay afloat without drastic inflationary methods or donations.
Given these factors, Multicoin put a sell recommendation on Litecoin and is currently short an undisclosed amount. The short interest on Litecoin recently hit an all-time high, despite the price being at a 52-week low.
This bearish report comes shortly after Charlie Lee, the founder of Litecoin, revealed that he is considering adding privacy functionality to bring true fungibility to the popular altcoin. Additionally, Lee recently went on record to state that he is not currently considering repurchasing LTC after notably selling and donating all of his holdings last year. This continues to be a significant point of contention for many investors.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.