Litecoin prices rose nearly 10% today as word the digital currency would be listed on Coinbase’s GDAX exchange spread among traders.
The move by the exchange to list LTC/USD and LTC/BTC currency pairs, however, was long anticipated, given that litecoin creator Charlie Lee has worked at the startup since 2013. Launched in 2011 and branded the “silver to bitcoin’s gold”, litecoin aims to offer faster transaction confirmation times for merchants.
At press time, it was the fourth larest digital currency by market cap.
Notably, litecoin prices began edging upwards far before the actual announcement, spurred by cryptic tweets and messages from Lee. According to data from BitcoinWisdom, the price of litecoin began to spike at roughly 9:00 UTC, rising from $3.58 to roughly $3.80 at 18:00 UTC, the time of the announcement.
During the session, LTC rose 9.3% to $4.01 amid heavy volume.
But, the move may have been subdued, as the market has long been aware of GDAX’s plans to list litecoin. (The exchange first revealed it would add the digital currency at some later date on 20th May).
Data suggests traders may have gone so far as to price in this listing long before it happened, as LTC rose to $4.83 by 28th May and $5.95 by 17th June, CoinMarketCap figures reveal.
At the time trading began on 23rd August, 1 LTC cost $3.66, nearly 40% below the high reached in mid-June.
Several traders reported to hearing rumors about the exchange’s plans as well, with one remarking the market likely “bought the rumor and sold the news”.
Temporary bump
While the increase is notable, some analysts emphasized it could merely be a temporary bump. In addition, others voiced their concerns about litecoin’s long-term viability, echoing criticisms that have long faced the project about its lack of innovative features.
Petar Zivkovkski, director of operators for leveraged bitcoin trading platform Whaleclub, told CoinDesk the move does nothing to change the digital currency’s “fundamentals”.
“The fact that GDAX added the pair to trade has given it temporary bullishness, but unfortunately we do not see this lasting unless some other catalyst provokes a sustained trend,” he said.
Arthur Hayes, CEO of leverage bitcoin trading platform BitMEX, also painted a picture of LTC’s price gains being only temporary.
“The price move was in anticipation of the addition of litecoin by Coinbase,” he told CoinDesk.
Going forward, it will be interesting to see whether litecoin can maintain either the price gains or robust trading volume it enjoyed today. Still, most traders were bearish on the idea.
Once valued at more than $48 during the bitcoin boom of late 2013, litecoin has since struggled to grow its market. Others suggested the move was motivated by GDAX’s need to add additional currencies to complement bitcoin and ether, which it added earlier this year.
“GDAX is presumably just responding to trader interest,” said cryptocurrency investment fund manager Jacob Eliosoff.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
Coinbase image via Facebook; Charts via BitcoinWisdom