LTC Q2 2021 results

Author

Tom Rodgers Head of Research

Overview

Key Indicators
Results Table
Litecoin Quarter Review: Q2 2021
Key Litecoin Events
Litecoin Technical Update
Litecoin Outlook

Key Indicators

Total transaction volume increased over 2,500% YOY on the Litecoin blockchain: to $340.3 billion in Q2 2021, compared to $12.8 billion in Q2 2020.

Total transaction fees increased almost 1,000% YOY. Also known as network revenue (the fees paid to miners) transaction fees increased 968.4% to US$ 0.41 million in Q2 2021, compared to US$ 0.04 million in Q2 2020.

Median transaction fees remained remarkably stable despite large ecosystem gains. Median fees increased just 11.0% to $0.0011 in Q2 2021, compared to $0.00099 in Q2 2020.

Daily active addresses increased more than 250% YOY. A proxy for daily active users, active addresses climbed 260.8% to 313.4k in Q2 2021, compared to 86.9k in Q2 2020.

Results Table

Q2 2020	Q2 2021	Y/Y
Transaction volume ($b)	12.8	340.3	2.563%
Transaction fees ($m)	0.04	0.41	968%
Median transaction fee ($)	0.00099	0.0011	11%
Daily active adresses (k)	86.9	313.4	261%
LTC supply (m)	65.4	68	4%

Litecoin Quarter Review: Q2 2021

In Q2 2021 Litecoin saw the most significant US$ value transfer over its network in its almost ten-year history, totaling US$28,1 billion or 91.1 million Litecoins. This value eclipses the previous largest day printed on December 21 in 2017, which reached $11.5 billion.

Litecoin was created by Charlie Lee as a fork of Bitcoin in 2011 and as such remains the most enduring altcoin in the cryptoasset sector. As the Litecoin Foundation, the non-profit organisation dedicated to promoting the decentralised payment network noted on 22 June 2021, Litecoin continues to have 100% uptime, maintaining security and transparency for users.

Regardless of price,#Litecoin will continue to…

• have 100% uptime
• be transparent
• offer incredible speeds
• be censorship resistant
• provide store of value
• give you freedom

Day and night, block after block

Litecoin is here to stay ⚡️
— Litecoin Foundation ⚡️ (@LTCFoundation) June 22, 2021

While in Q2 2021 it has been overtaken in the top 10 most valuable cryptoassets by market cap, Litecoin’s stability and longevity remains an important factor in institutional portfolio allocation.

As demand for digital assets amongst the traditional investment community steadily increases, we are starting to see the green shoots of demand for investment exposures outside of the top two dominant networks, Frank Spiteri, CRO at CoinShares.

As we heard in Q1 2021, Grayscale bought 80% of all Litecoin mined in February (over 174,000 LTC), demonstrating demand among accredited and institutional investors for the premier altcoin.

The release of physically-backed Litecoin ETPs by ETC Group’s Litecoin ETC (ELTC) on Deutsche Börse XETRA on 12 April and Coinshares (LITE) on the SIX Swiss Exchange on 6 April 2021, reflect this growing appetite for a greater depth of cryptoasset allocation. As the name suggests, Lee’s intention for Litecoin was to be a ‘light’ version of Bitcoin: an altcoin more suited to payments than the original cryptocurrency, with faster transaction times and lower fees.

Litecoin Core, the code that underpins the blockchain, is written in the highly-popular and common programming language C++, while Python is used for some ancillary tools. That means its code is simple for external developers to use and understand.

With its faster block times and higher transaction throughput, Litecoin was conceived as a more practical and scalable medium of exchange than Bitcoin. The growing results of this can be seen in Litecoin’s daily active addresses, which grew strongly in Q2 2021 to an average of over 300,000 users.

The stability of its transaction fees — as Litecoin is used primarily as a payments network — is key, and we saw network fees rise only 11% to a median of less than 1 US cent per transaction.

In terms of adoption, the number of companies accepting Litecoin also increased 73.4% to 2,713 in Q2 2021, compared to 1,565 in Q2 2020.

Litecoin has grown by 342% in the past 12 months and is the ninth-largest cryptocurrency by market capitalization at US$14.6 billion with growing interest from institutional and retail investors. Bradley Duke, CEO, ETC Group.

Key Litecoin Events

Venmo, currently ranked the second most popular financial app in the U.S., has started allowing its 52m+ users to store, buy, and sell Litecoin, and other cryptocurrencies, on its platform.

ForUsAll Inc., a 401(k) provider, announced a deal with the institutional arm of Coinbase Global Inc, that will allow workers in plans it administers to invest up to 5% of their 401(k) contributions in Litecoin.

Saxo Bank, an online trading and investment specialist, is launching a new cryptocurrency offering. Clients from the MENA region will be able to trade Litecoin, Bitcoin, and Ether against EUR, USD, and JPY from a single margin account.

Hello Pal, a Canadian tech firm, became the first listed company to own a Litecoin mining arm when it bought the Crypto Pal startup on 25 May 2021.

Two investment firms, ETC Group and CoinShares, launched institutionally-focused Litecoin ETP products in Q2 2021. ETC Group Physical Litecoin (ELTC) launched on SIX Swiss Exchange on 25 May 2021, just four weeks after listing its ELTC Physical Litecoin ETC on Deutche Börse XETRA. On 6 April 2021, CoinShares listed its Physical Litecoin ETP (LITE) on the SIX Swiss Exchange.

Litecoin Technical Update

In March 2021, The Litecoin Foundation completed the code for MWEB (Mimblewimble via Extension Blocks), an essential upgrade to the Litecoin protocol. With this update, Litecoin will become more scalable and able to transaction amounts un-viewable to the public, making it the best choice for payments while protecting sender/receiver’s data.

Litecoin’s implementation of MWEB continues apace, and a 5 May 2021 update noted that the privacy and scalability update remains on track for launch the end of 2021. Lead developer David Burkett has added automated builds for Linux and Windows, allowing for faster feedback, as well as allowing non-developers to aid with testing without needing to build the code themselves.

On 19 June, the largest supplier of cryptocurrency mining machines, Bitmain, announced it would release a new ASIC-based Scrypt miner that is four times faster than current hardware. Journalists at the event reported the L7 miner purports to have a hash rate of 9500MH/s. Scrypt is the consensus algorithm that secures Litecoin, along with several other cryptocurrencies including Dogecoin, Digibyte and Verge. Quicker and more readily available mining systems are expected to make securing Litecoin’s network more simple and cost effective, as well as upping transaction process throughput.

Litecoin Outlook

Litecoin does get additional value from being so closely tied to Bitcoin and is commonly referred to as the ‘digital silver’ to Bitcoin’s ‘digital gold’. Both assets have a hard-capped supply that gives the assets a scarcity aspect similar to precious metals. However, the developments we have seen this quarter run far beyond that simplistic analogy.

And while Litecoin has fallen out of the top ten crytpoassets by market cap in Q2 2021, significant upcoming technical developments may pull it back into contention.

The development of the Litecoin project is overseen by a non-profit Singapore-based Litecoin Foundation, with Charlie Lee as a managing director. Although the Foundation and the development team are independent, the Foundation provides financial support to the team.

MWEB represents is a significant evolution for the Litecoin protocol, promising to improve privacy and fungibility and its release towards the end of 2021 is on track, according to the Foundation.

And so while comparatively little academic or media attention is focused on Litecoin, its network effects continue to improve. Now in its tenth year of 100% uptime, Litecoin remains a secure blockchain with a large user base, and the addition of institutionally-focused ETP products is testament to this effect. More institutional investors are seeking exposure to Litecoin but, true to the ETP theme across cryptoassets, want it with the safety and liquidity of a centrally cleared exchange-traded product.

Litecoin has also benefited and is continuing to benefit from the recently released Checkout with Crypto service from PayPal. Users can now use digital currency to purchase on all 29 million merchants that accept PayPal.

Credits: Article layout originally inspired by James Wang

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