It’s time to start looking for an overlooked or undervalued cryptocurrency with potential to rebound in 2025. In a best-case scenario, it should be a cryptocurrency well below its all-time high and with a compelling investment thesis for the year. in front. He should also have a proven track record of explosive upward movements.
A cryptocurrency that meets these three criteria is Litecoin (LTC -2.60%). Even though Litecoin is only up 42% this year, it could see a much more impressive performance in 2025. Here’s why.
“Digital money”
As its name suggests, Litecoin is a “lite” version of Bitcoin (BTC -1.55%). It was launched in 2011, using much of the same computer source code used to create Bitcoin. As a result, Litecoin shares many of the same underlying characteristics as Bitcoin. For example, it is mined like Bitcoin, is halved every four years just like Bitcoin, and has a relatively low circulating coin supply, giving it almost the same type of scarcity as Bitcoin.
The creators of Litecoin envisioned it as a faster, cheaper, and more efficient version of Bitcoin. If Bitcoin is “digital gold”, then Litecoin is “digital money”. Although Litecoin has lost some of its luster over the past decade, it remains one of the 25 largest cryptocurrencies in the world, with a market capitalization of almost $8 billion.
The spot ETF investment thesis
All of these features of Litecoin are particularly important as we approach 2025. Indeed, Litecoin is generally considered considerably less risky than other, more speculative cryptocurrencies. Just like Bitcoin, Litecoin is considered a commodity and not a security. Theoretically, this makes it much easier for regulators to approve new Litecoin-related products.
Image source: Getty Images.
In fact, a growing consensus now is that Litecoin will be the next cryptocurrency to benefit from a spot exchange-traded fund (ETF). As Bloomberg highlighted earlier this month, several other top cryptocurrencies are often mentioned as potential candidates for spot ETFs, such as XRP And Solana — may still carry too many regulatory risks. In contrast, Litecoin is basically free of regulatory concerns and has a much clearer path to approval from the Securities and Exchange Commission (SEC).
Last October, crypto investment firm Canary Capital filed a Litecoin spot ETF with the SEC, and the price of Litecoin soared 10%. Given all the pro-crypto optimism surrounding the Trump administration, we could potentially see a one-time approval of the Litecoin ETF by mid-2025, or even sooner. If so, it could cause the price of Litecoin to skyrocket. This is the same pattern we saw with the launch of the new spot Bitcoin ETFs.
Does Litecoin have breakout potential?
The big question, of course, is how much disruptive potential Litecoin might have. The coin is currently trading around $100, more than 75% below its all-time high of $412. This is important as other leading cryptocurrencies (such as Bitcoin) are setting new all-time highs or are close to reaching their all-time highs. Litecoin appears to have a lot more room to run.
It is interesting to consider what happened with Litecoin during the previous crypto bull market rally in 2020-2021. As of October 2020, Litecoin was trading at around $50 and not attracting much attention from investors. However, within a span of seven months, Litecoin surpassed the $400 mark in May 2021. Litecoin saw a similar development in 2017, when it also reached $400. So we know that Litecoin definitely has explosive upside potential.
Can Litecoin deliver booster performance in 2025? To answer this question, it is useful to consider the correlation between Bitcoin and Litecoin. Over the past year, the correlation between the two is 0.75. The only other major altcoin with a significantly higher correlation over this period is Ethereumwhich has a correlation of 0.89 with Bitcoin.
This tells me that Litecoin has a relatively high probability of following the upward moves made by Bitcoin over the next 12 months. If you think the value of Bitcoin will explode next year, Litecoin could be with you.
Before buying Litecoin, read this
Just keep in mind that there is a reason why Litecoin is trading 75% below its all-time high. There is a reason why it was removed from the list of top 20 cryptocurrencies by market cap. And there is a reason why Litecoin has significantly underperformed Bitcoin this year. It could simply be that Litecoin’s best days are already behind it.
That said, it’s always exciting to discover an overlooked gem or find a potentially extremely undervalued investment. If the SEC approves a spot Litecoin ETF next year, Litecoin could become the first breakthrough cryptocurrency of 2025.
