Following on the heels of a near 300% rise in price over 48 hours, Litecoin creator Charlie Lee issued a warning to new investors to LTC and cryptocurrency via his twitter: “Sorry to the spoil the party, but I need to reign in the excitement a bit…Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value…So if you can’t handle LTC dropping to $20, don’t buy!”
Ok, sorry to spoil the party, but I need to reign in the excitement a bit…
Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy! 😀
— Charlie Lee [LTC] (@SatoshiLite) December 11, 2017
While some have used the tweet to espouse the bubble-like potential of cryptocurrency, and Litecoin in particular, Lee’s warning is an indication for investors to look past short term gains and volatility in price.
People are going to continue buying Litecoin without knowing what it is (as evidenced by the numerous articles this week describing LTC in general terms). But these investors, the people chasing gains with little interest in the technology, are the ones in need of Lee’s warning. Crypto is volatile, on a level most can’t imagine coming from the relative stability of the stock market. A $100 increase in price one day could feed into a $150 drop the next. Some investors will spook. Some will cause a panic sell and further drop the price. For the rest, for those who hold their investment, whether to see it grow or at least return to their buy-in level, those are the people with potential. Those are the newcomers who are invested in the future of crypto and can help in creating further adoption.
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The aftermath of Lee’s tweet has left Litecoin-enthusiasts scratching their heads and traditional, financial media outlets moving in for the kill. Why would the creator of Litecoin, in the midst of an amazing breakout, temper expectations for his cryptocurrency? While many headlines would have you believe Lee’s tweet is an indication of the current crypto-bubble, in reality, the LTC creator is urging his audience and investors to think long-term. Litecoin leaped all the way to $400 USD on a 300% surge in price in 48 hours. Now, just days later, its value is hovering around and below 300 USD. Litecoin, and crypto for that matter, has yet to reach the market saturation that will slow down volatility. Think of any currency attempting to emerge on the global market, and you will see a similar occurrence as the one happening with crypto.
We should applaud Charlie for ignoring his personal stake in LTC to remind investors the sobering truth of a correction. That being said, it should not dampen the enthusiasm for the future of Litecoin and cryptocurrency. Crypto, at times, can be a difficult place to have your money, but it’s also one of the most invigorating technologies to come about since the onset of the internet. Whether you are in crypto simply for the profits, or you have lofty expectations for the technology, remember: these are the early days.
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