An explanation of Litecoin’s price spike

On July 9, Litecoin reached exchange rates exceeding $7.75, €7.00, ¥48, and 0.29 Bitcoins. This represents a growth rate of over 22 percent in the past 24 hours. In the past week, Litecoin has gained over 79 percent against Bitcoin, 88 percent against the US dollar, and 90 percent against the Euro and the Chinese yuan. There are several reasons why this could be happening, and no one reason should be assumed to be fully responsible. Let us examine the most likely possibilities.

Pure speculation

Like all investments with a relatively small market cap and relatively low amount of liquidity, Litecoin attracts speculators who seek to profit off of pump-and-dump schemes. It also helps that financial regulators mostly turn a blind eye to cryptocurrencies at present, lessening the likelihood of legal troubles. Unlike lesser known altcoins with smaller market caps, Litecoin has enough users and size to make a bubble last for days or even weeks. This has happened before; in the price spike that occurred in the fourth quarter of 2013, Litecoin exchange rates surged as high as $55, €38.58, ¥253, and 0.06

Read more ... source: Bitcoin Warrior