Why is Litecoin Doing so Well?

Today Litecoin is up 62% on the month, 24% on the week and a solid 200% on the year. Its price has dipped a tiny 2% at the time of writing, but it is still possible to say that Litecoin has been doing remarkably well during this latest surge in the crypto markets.

Litecoin began 2019 at around $30, representing a dramatic plunge in price during 2018. As ever, people are looking for explanations for this reversal of fortune. Billy Bambrough, writing at Forbes believes that it may in part be due to the upcoming halvening of bitcoin, which will happen in May next year. Halvenings always seem to trigger a price surge. The bitcoin event will result in he number of bitcoins awarded to miners for mining new bitcoin blocks will drop from 12.5 bitcoin to 6.25 bitcoin. “We are going to hoard bitcoin at this point in time,” Brian Kelly, a bitcoin and cryptocurrency fund manager told CNBC. “We’re not going to sell it. You generally have a rally a year into [a bitcoin halvening], and a year out of it. And so we’re just at the beginning of that stage […] a supply cut is generally bullish.”

A halving and more use of litecoin

Litecoin is due to halve its miner rewards in August of this year, and if the economic theory applied to bitcoin’s supply reduction due to the halvening are correct, it will also apply to litecoin, which will see its mining reward fall from 25 litecoin to 12.5 litecoin.

What has happened during previous bitcoin halvenings, which are fixed events that occur after every 210,000 blocks have been mined. For example, about one year after the first bitcoin halving event in November 2012, the bitcoin price reached what was then an all-time high of $1,000. And the 2016 halvening appeared to precipitate the bull run of 2017 when bitcoin touched almost $20,000.

But it isn’t just Litecoin’s upcoming halvening that has boosted its price. Over the last few months litecoin has gone through some technical improvements and it is being spent via Coinbase Visa cards at millions of locations worldwide. Coinbase users can choose which cryptocurrency is used on the card through a new app that supports all crypto assets available to buy and sell on the Coinbase platform. The app also offers instant receipts, transaction summaries, and spending categories, to help people keep track of their spending.

Litecoin has been seen as one of the most credible rivals to bitcoin for some time; perhaps this is the year when it finally asserts itself as a serious contender in the crypto market.

Facebook’s Globalcoin is coming soon

We have learnt in the last few days that Facebook is poised to launch its ‘Globalcoin’ in 2020. Currently, the media giant is consulting with US financial regulatory authorities, as well as those of 11 other countries about operational and regulatory issues. It is likely that the token will be tested before the end of 2019.

Apparently Facebook’s CEO Mark Zuckerberg has also been having lengthy discussions with Mark Carney, the governor of the Bank of England about the opportunities and risks involved in launching the company’s cryptocurrency. So, it seems likely that the UK will be one of the countries where Globalcoin will be available.

There are also ongoing meetings between Facebook and some of the world’s payment giants, such as Western Union and Paypal, as well as online merchants, as it looks for cheaper and faster ways for people without a bank account to send and receive money.

Facebook may dominate the payments sector

Because that is Facebook’s overall aim: to move into this valuable financial sector. According to International Business Times, “Facebook wants to develop GlobalCoin into a digital currency that provides affordable and secure ways of making payments. Facebook also wants to enable people to change dollars and other international currencies into its GlobalCoin with the minimum of fuss.”

How will it achieve this goal? It would appear that Facebook is going to issue Globalcoin as a ‘stablecoin’ pegged to the US dollar. This eliminates the volatility that is a challenging factor of the crypto market, at least for merchants and payment service providers.

Will lack of consumer trust damage Globalcoin?

Still, things may not be all plain sailing for Facebook. There is the matter of consumer trust for a start. In the last two years Facebook has been named in a mnumber of scandals concerning the sharing of user data with other parties; Cambridge Analytica being the most notable one. Zuckerberg has been forced to testify in front of both the US and UK governments regarding this, and Zuckerberg’s conduct in both cases gave rise to a feeling that the company has behaved with some arrogance and belief that it is untouchable. Therefore, Facebook users may not be rushing to use the new token: instead it is entirely possible that they many will walk away from it as a form of protest. On the other hand, if the token is seen to provide a useful service, it may do well. It has billions of users so a few protesters may not make much difference to its success.

Analysts say Facebook wants to disrupt existing banking networks by breaking down financial barriers and reducing consumer costs. However, Facebook will have to partner with banks and brokers to attain this aim. Plus, GlobalCoin will need to overcome numerous technical and regulatory hurdles before it can be launched.

There are countries where it may get a warm reception and others, like India, where there be no welcome at all. Significantly, it is rumoured that Facebook is particularly interested in launching in India, which makes sense when you think of the size of the population and the fact that there are many, many unbanked Indian citizens that own a smartphone. Facebook also hopes GlobalCoin will allow Indian workers abroad to remit money back home to their families using WhatsApp, which is another big market. However, as India has been fairly hostile to cryptocurrencies to date, this may prove to be a significant challenge.

It won’t be to long before we have a better idea of Facebook’s precise strategy, but given that it is one of the biggest players in social media, it seem unlikely that it will settle for being a small fish in the crypto sector.

Should you give up your Huawei smartphone?

Hot on the heels of the US government putting Huawei on a blacklist, Google stepped in and announced it is blocking Huawei’s access to Android updates for apps and security features.

This is a blow to the Chinese smartphone and telecoms tech manufacturer, and creates a problem for Huawei phone owners.

Google is following the government policy prohibiting US firms to do business with Huawei. As a result Google has been forced to restrict the company’s access to the Google Play Store, which means that in the future users won’t be able to gain access to popular titles, nor to speedy security updates to the Android OS. This means Huawei will no longer be able to offer access to crucial Google apps, and will be severely limited in how quickly it can give users access to the latest versions of Android.

If you’re a Huawei phone owner you must be wondering what to do next. Well, there is some good news. According to TechRadar the “US Commerce Department has temporarily lifted the ban on American businesses working with Huawei — allowing software updates to continue on Huawei phones.”

This temporary licence rolls back the US government’s restrictions and will allow Google to continue working with Huawei, allowing the Chinese brand to keep using Android in the same manner as before until 19th August.

This is good news for Huawei, because it gives it more time to “prepare for the launch of its next handsets and develop the Android Q update for its current smartphones,” TechRadar reports.

However, whilst Huawei has given the impression that it is relatively unperturbed by the US government and Google’s actions, it still leaves it in a vulnerable position in the marketplace without full access to the Android operating system.

But it also gives Huawei more time to argue the case for not being on the US government’s blacklist and prove that it is not a danger to national security. The USA is not the only country that believes Huawei’s products may play a role in Chinese espionage, particularly with regard to building 5G systems. Japan, Australia and New Zealand have also banned the use of Huawei products for 5G, and others may follow.

But while the debate continues, Huawei smartphone owners may need to consider whether to continue using its phones, or change to another company. Interestingly, on the day the news about Google and Huawei was published, I noticed Apple was running a new ad campaign. Coincidence? It seems unlikely.

Is there an Uber IPO conspiracy?

I ask this question, because there are rumours floating around that suggest the US government and General Motors (GM) are in cahoots to suppress Uber’s $120 billion IPO and promote Lyft.

I first came across the idea via a CCN article by Nicole Grinstead. She has provided an excellent infographic explaining the race between Uber and Lyft, or should I call it a battle, that has been ongoing since Lyft launched in 2012. It shows that in 2015, Lyft got a major influx of investment from China, and in the following year it entered into a partnership with GM. This was intended to improve their share of the ride-sharing market, and advance GM in the autonomous car sector. However, in August 2016, Lyft’s former Chines partner bought Uber China, ending the relationship. In December 2018, Lyft filed for an IPO with the SEC, and later the same day, Uber also filed for an IPO. And so the battle lines were drawn.

The Lyft-Uber IPO battle

Now they are embroiled in an IPO race that is happening in Japan as well as the USA, mainly because the largest investors in Uber and Lyft are based in Tokyo. Lyft is much smaller than Uber, and it is estimated that its IPO will take place this week. Lyft’s co-founder John Zimmer recently claimed that he isn’t worried about beating Uber to an IPO. Maybe, Grinstead writes, that’s because he knew that Lyft’s victory in the rivals’ race to debut on the stock market was guaranteed. She also remarks that if Lyft can get to an IPO first, it will have an advantage over Uber and could topple Uber from its place as market leader.

More competition for Uber

However, Uber faces bigger issues than the Lyft IPO. In February, Daimler and BMW announced their additional $1.13 billion investment in their joint venture to compete with ride-hailing companies. BMW CEO Harald Krueger made a statement outlining a five-prong plan to offer services ranging from ride-hailing and vehicle charging to parking and car-sharing, or in his own words, “To form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously.”

US government and GM in possible conspiracy?

But let’s get back to the conspiracy. As Grinstead says, “GM’s 9% ownership of Lyft could provide cause to suspect a government conspiracy to promote FUD about Uber.” Furthermore, while the US government sold the last of taxpayers’ GM shares in 2013, the government’s 2009 bailout of GM could be said to indicate that the government now wants to ensure GM’s ongoing profitability. And as Grinstead also remarks, GM and the government have been linked in sufficient conspiracies before now to make interference in the Uber IPO not beyond the realms of possibility. Grinstead concludes by saying, “Evidence to support this conspiracy is anecdotal at best. Nonetheless, if Uber is facing secret government opposition, it may be the biggest hurdle standing between them and $120 billion.”

All you have to do is follow the money, because in the end that is what it is all about for the government, GM and the two competitors — Lyft and Uber.