Litecoin's recent foray into the nonfungible token (NFT) industry has resulted in a spike in retail interest for LTC tokens. The price of Litecoin experienced an upward shift on May 15, with the market acknowledging its involvement in the booming NFT sector. The LTC price surged by over 6.5% on the same day, reaching around $87.50, making it one of the top performers among leading cryptocurrencies like Bitcoin and Ether. Notably, the LTC price has risen by 115% from its low of $40.25 in June 2022.
Introduction of Litecoin's Unique Token Standard
The LTC price rally occurred two weeks after introducing the Litecoin Ordinals Protocol. This concept mirrors Bitcoin's Ordinals Protocol, which lets users mint NFTs, including text, images, audio, and video, on the base blockchain using a novel BRC-20 token standard, similar to Ethereum's ERC-20. On May 2, the Litecoin community unveiled a forked version of the BRC-20 standard, "LTC-20." Consequently, anyone can now embed an NFT — an LTC-20 standard token — into the Litecoin blockchain using its native Ordinals protocol.
Record-Breaking Network Activity Following the LTC-20 Standard Launch
Litecoin network activity saw a significant rise after introducing the LTC-20 standard. The daily on-chain transactions reached a record high of over 576,700 on May 9, as per BitInfoCharts.com. As of May 14, although transactions had decreased to 511,290, they remained high by historical standards. Moreover, Santiment data revealed a substantial increase in the total number of active addresses on the Litecoin network following the introduction of the LTC-20 token standard.
Impact of LTC-20 on Litecoin's Supply Distribution
As per Sentiments observations, the smallest group of wallets, holding between 0 and 0.001 LTC, saw rapid growth, coinciding with increased active addresses. This trend indicates that the LTC-20 could be the catalyst behind the active address anomaly on the Litecoin network. On the contrary, the number of Litecoin whales, or entities holding more than 1,000 LTC in their unique addresses, has decreased, indicating a comparatively lesser interest in the LTC-20 hype.
Future Projections for Litecoin Price
The heightened network activity implies a growing demand for LTC, which likely influenced the recent rise in Litecoin's price. Further, the excitement surrounding the upcoming Litecoin halving in August bolsters LTC's upside potential. From a technical standpoint, as of May 15, LTC/USD was testing the channel's upper trendline as support. If successful, this could drive the price towards $130 by August, a roughly 50% increase from current levels. Conversely, if unsuccessful, the Litecoin price could fall back into the channel range, potentially dropping to around $25, a decrease of about 70% from the current price.