Litecoin (LTC) has seen a significant price surge, reaching its highest level in the past two weeks, despite a slight dip in the overall cryptocurrency market. The digital currency recorded an impressive 9.25% increase over the prior 24-hour period to hit approximately $99, even as the crypto sector experienced a 1.15% decline. Despite the recent spike, Litecoin’s performance since the beginning of the year lags behind the broader market.
Driving Forces Behind Litecoin’s Surge
The surge in Litecoin’s value is linked to market reactions following the reintroduction of a substantial number of previously inactive Litecoin tokens into the market. Data from Glassnode, a blockchain analytics firm, shows that over 600,000 LTC tokens, worth more than $60 million, re-entered circulation on March 5th after a dormancy of five years, marking the most significant one-day resurgence to date.
Despite an initial 19% price decline on the day of the tokens’ reactivation, Litecoin has since bounced back by 37.25%. This rebound suggests that the market has effectively assimilated the influx of these reactivated tokens. The current price rally is part of this broader recovery, mirroring a pattern observed prior to Litecoin’s 2017 monumental price increase.
LTC Futures Potential and Market Optimism
Adding to the upward momentum, Litecoin may soon benefit from the launch of cash-settled Litecoin futures contracts by Coinbase. The derivatives arm of the cryptocurrency exchange submitted an application on March 7th to the US Commodity Futures Trading Commission for offering futures contracts not just for Litecoin, but also for Dogecoin and Bitcoin Cash, beginning April 1st.
The prospect of cash-settled futures could draw more institutional investors to Litecoin, similar to the impact of the CME Bitcoin futures introduction in December 2017. This potential development is seen as a key contributing factor to the recent appreciation in Litecoin’s market price.