According to its latest market analysis of Litecoin, eToro concludes that the cryptocurrency is selling a lot cheaper than what it would be worth given the current market, going as far as to say that LTC is priced at “a massive discount.”
“According to the metrics we have analysed below, the current price that LTC is trading at could be seen as a massive discount to what it should be worth,”
the analysis said.
eToro’s reasoning behind this conclusion is that Litecoin, despite being in the same market as Bitcoin, doesn’t compete with it and instead chooses to distinguish itself as a different type of asset. It’s lightweight, similar in function, but very versatile because of its fast and cheap transactions, making it a cryptocurrency more capable of adoption in a larger market.
“Meanwhile, both see the majority of its use as a store of value, similar to their precious metal counterparts. With the relative price to each other being highly correlated, Litecoin can offer some diversification for investors as well as room for growth with a much more affordable coin than Bitcoin,”
The company also pointed out that the ratio of Bitcoin to Litecoin is quite similar to the ratio of gold to silver. When silver became more abundant due to new mining technologies and the discovery of newer sources, it quickly dropped in value and became a smaller cousin of gold as an asset.
eToro’s opinion on the matter doesn’t mean that people should just start putting everything they have into Litecoin. The company even warned investors reading its analysis not to put more than 20% of their portfolio into cryptocurrencies in general.
As for the coin itself, it’s generally not wise to put all of one’s eggs in a single basket. Given that Litecoin fell harder than other cryptocurrencies at the beginning of the year, however, we could understand why eToro said that this could be an opportunity to buy a digital coin that is possibly sold at a discounted price.