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Why the Litecoin (LTC) price is tanking

It certainly has been a wild day of trade for cryptocurrency markets. After a brief rebound in late morning trade, the market retreated significantly as the day wore on.

At the time of writing the value of the entire crypto market has fallen below the symbolic US$300 billion mark again and is at US$295 billion according to Coin Market Cap.

The bitcoin (BTC) price has been the biggest drag on proceedings, falling 8% since this time yesterday to US$7,882 per coin. This decline has wiped US$11.4 billion off its market capitalisation, leaving it at US$132.5 billion.

The bitcoin price has been caught up in a broad crypto sell-off after Twitter decided to follow Google and Facebook’s lead by banning cryptocurrency advertising on its platform.

While bitcoin may take the headlines today, one of its altcoin rivals has easily been the worst performer amongst the major coins.

The Litecoin (LTC) price has plunged 13.5% during the last 24 hours to US$138.98 per token. This reduces its market capitalisation to US$7.7 billion.

Why is Litecoin tanking?

The Litecoin price has been hit after its founder announced that the LitePay merchant payment processing technology has been scrapped.

The technology was supposed to be the first step in taking Litecoin mainstream, but the company operating it failed to deliver on its promises.

The Litecoin Foundation, a non-profit for advancing Litecoin and an investor in LitePay, made the announcement through its website.

This was followed up with a tweet by the cryptocurrency’s founder Charlie Lee apologising for the misstep. Mr Lee tweeted that: “Like everyone else, we got too excited about something that was too good to be true and we optimistically overlooked many of the warning signs. I am sorry for having hyped up this company and vow to do better due diligence in the future.”

I think this is bad news for Litecoin holders and wouldn’t be surprised to see its price continue to tumble over the coming day, unfortunately. Traders might want to give Litecoin a wide berth for the time being.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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