Like many cryptocurrencies, Litecoin has seen its value increase from what it was during the crypto winter. What some in the crypto community are not aware of is that the founder of the coin Charlie Lee is not a holder and the cryptocurrency has performed well despite Lee selling off his LTC assets.
The reason he did that was what he called a conflict of interest. Some of his Tweeter followers were skeptical of his intentions prior to the 2017 sell-off. These followers thought that Lee’s tweets were meant to pump the coin. This led to his decision to sell off his Litecoin holdings in 2017, at a time the coin was valued $350.
That decision did not go down well with many holders of the coin who saw the move as someone not taking care of their own children. There have been insinuations that the coin would have performed better if the Litecoin founder had kept his assets.
Although no one is sure of the impact that this may have had on the Litecoin community and its price, there is no doubt that some may have followed the example of Lee by selling off.
However Lee is not impressed with any holders of Litecoin following his example. The respected founder said that those that sold their holding because he did were “silly” because they didn’t have any reason for holding it in the first instance.
In a podcast in which he was featured by Laura Shin, Lee said,
“If you’re not holding onto Litecoin because I don’t have any, then your reason for holding and using Litecoin is just silly to begin with.”
What is clear is that Litecoin has continued to perform well despite the fact that Lee is not a hodler. The coin is presently trading at $77.85 and among the top 6 coins according to market capitalization.
Another obvious fact about the Charlie Lee sell-off is that he didn’t do it because he thought the coin didn’t have great prospects. Lee stated that he bought his first bitcoins when the coin was valued $30. The value would later plunge to $2 within 12 months but he did not sell off because according to him, he knew that the features of Bitcoin had not changed.
Right Approach to Investing
This approach is instructive in making investors understand that price fluctuations of crypto assets are mainly due to market forces and not due to the drop in utility or features of the cryptocurrency.
An asset could drop in value if it is over hyped or has some technical problems such as a security breach. For instance, the 2017 price hike of Bitcoin was mainly due to hype resulting from the fact that many investors were new and understood little about the coin so they mostly sold out their positions when the market stalled.
The recent resurgence in the price of Bitcoin could be termed organic because most investors at this stage are people who understood what they are buying not because there are people hyping it.