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.
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 Bitcoins.
Instability in Greece
As the situation in Greece continues to deteriorate, the government is tightening capital controls and may even attempt a bail-in where private funds are directly stolen from bank accounts to prop up the banking system, as occurred in Cyprus in 2013. Just as then, this has led affected citizens to look for safety, and cryptocurrencies are one avenue for this. Reuters reported that new customers depositing at least €50 with BTCGreece increased by 400 percent from May to June, and the average deposit increased by
Originally appeared at: http://www.examiner.com/article/an-explanation-of-litecoin-s-price-spike