It is a tough business being in the altcoin game at the moment.
In general, the cryptocurrency market is somewhat stuttering currently. Bitcoin is not doing much between the $10,000 and $13,000 range, but spare a thought for the altcoins. It has been quite a bearish outlook through 2019 for them, even though many put the “Cryptocurrency Spring” down to Litecoin’s excellent performance in early 2019.
Regardless, Litecoin creator Charlie Lee, who sold all his LTC holdings in December 2017, says he is committed to supporting the foundation financially. Rumors are that the Litecoin Foundation is not in a strong financial space and that since 2017, Lee’s donations have accounted for some 80 percent of the foundation’s funding.
“The goal, of course, is to get Litecoin Foundation to be self-sustaining from donations, partnerships and merchandise sales,” Lee said. “Until we get to that point, I have and will continue to support the Litecoin Foundation financially as necessary.”
It is an amicable thing that Lee is doing, for what is his own creation, but it must also be a difficult thing too. Forking out vast sums of money for an altcoin project is getting harder and harder as Bitcoin continues to dominate.
The latest figures on market dominance show Bitcoin at an astonishing 69 percent. Its market cap is $182 billion while Litcoin’s sits with $4 billion. Moreover, there has even been a study suggesting that Bitcoin’s dominance may be at 90 percent.
Even if the study is totally off and Bitcoin dominance does not account for 90 percent, the conclusion drawn still rings true. The research suggests that the longer Bitcoin is so far ahead, the less chance altcoins have of thriving and expanding because those integrating cryptocurrencies will be looking only at Bitcoin.
However, as is the whole intention of Litecoin, its approach varies from the Bitcoin one. Litecoin is designed to work as a fast, cheap currency, and is far more transactional. This has led them to land a few key partnerships. One flagship partnership is with the NFL team, the Miami Dolphins, who accept cryptocurrency and list Litecoin as their official crypto.
So, perhaps Litecoin is still on the up, and growing steadily, despite the reliance on donations from their creator.
Litecoin Foundation board director Xinxi Wang has said that they saw a drop in donations for the first quarter because of the broader bear market, but they expect that to change in the next few reports.
He also goes on to dispel the correlation between enthusiasm for the crypto and the level of donations they are receiving.
“I don’t think there is a correlation between donations and enthusiasm,” Wang XCong. “First, we did not actively solicit donations from the community in Q1. Second, the price of Litecoin was low, so the same amount of Litecoin donations were worth less than before. In Q2, we received hundreds of thousands of dollars worth of donations.”