News recently hit crypto enthusiasts everywhere that the father of digital money, bitcoin had swelled to more than $5,000 in just a few minutes. Considering all the bad news surrounding bitcoin in 2018, traders and analysts are taking the news to heart and celebrating with grins on their faces, even though $5,000 is far from where bitcoin stood just one year ago.
Bitcoin isn’t alone in its ascension. The currency was joined by Litecoin, which has seen slow, steady gains over the past few days. Wednesday morning, however, saw the currency experience a jump exceeding 19 percent, marking the largest swell for Litecoin in some time.
The currency is now trading for just under $84. Many are wondering if $90 is right around the corner.
It’s solid news, to say the least, but the fact remains that Litecoin is still down, and probably will be for a while. During its 2017 heyday, Litecoin was worth approximately $420. Even with the recent gains, the currency is still down by well over 70 percent, an ugly sight for any cryptocurrency fan regardless of location, time or date.
Still, the currency must start out small, and is once again working its way up the financial ladder. Though it’s always possible that a currency could spike into the hundreds overnight, recent circumstances suggest that this is not logical.
Though specific reasons remain unknown, Litecoin’s rise to power may have something to do with U.S.-based cryptocurrency exchange Coinbase. Valued at over $8 billion, the exchange has yet to suffer any sort of theft or malicious attack. Coinbase is now looking to keep its record high by joining hands with Lloyd’s of London to garner up to $255 million in insurance coverage for its hot wallet storage.
The exchange released a statement, claiming:
We currently hold a hot wallet policy with a $255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies. The rationale has remained the same the entire time: if the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole. Data is clear that today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking.
Though purely speculative, the insurance policy may have helped push interest in both Litecoin and bitcoin alike, which could be the reasons for the spikes. Each currency is offered for trading and purchase via Coinbase. Do customers suddenly feel safer? Does this instill stronger feelings of trust that they can buy and trade with support?
Litecoin is currently the sixth-largest cryptocurrency by market cap.