It’s been exciting watching litecoin go from ~$10 to ~$30 over the past 48 hours, and seeing bitcoin punch through $1000 today. But I’d urge everyone to not make any rash decisions about dumping large amounts of cash into crypto, with the hopes of riding this crazy train to riches. The current growth is mostly being driven by rampant speculation, and it isn’t sustainable.
Litecoin performance over the past 24 hours on btc-e.com
There will very likely be a correction at some point in the near future. Given the massive growth of litecoin, and bitcoin passing through the $1000 barrier, you can also expect a lot of mainstream media attention in the coming days—so we might actually see an even crazier price run-up before prices return to saner levels. But anyone that doesn’t expect a short-term correction is probably in denial.
In my opinion, before these kinds of valuations are justified, we need to see far more acceptance of cryptocurrency from merchants, and we need consumers that are willing to actually spend their coins on everyday purchases—instead of hoarding them in the hopes of a huge payday. In the case of altcoins, we also need better support from the major trustworthy payment processors and exchanges. Progress is being made on all fronts, but we have quite a ways to go. I believe we’ll get there, but it won’t happen overnight.
I’m absolutely not suggesting that you should exit your position in crypto immediately, and then re-buy after the inevitable correction occurs. Trying to time the market requires a lot of luck, and will likely result in regret for most of those that attempt it. I still absolutely believe in the $50+ prediction for Litecoin that I made 2 weeks ago (LTC was $4/coin then!), I just didn’t expect that we’d be more than halfway there before reaching the end of the month! If you agree that Litecoin has a potentially bright future, then the best move for most of you is to simply not panic when the inevitable correction happens.
Keep calm and continue mining. Try to not get caught up in the price hype, although I’ll be the first to admit that it’s certainly fascinating to watch.