The price of Litecoin (LTC) has rallied in recent days, despite issues on BitMEX exchange. The trading platform made a name for itself in 2018 after offering leverage of up to 100:1 and, essentially, offering a way for investors to short-sell cryptos. The feature created a buzz, but recent events have shown a flaw in the system.
Outlined in a twitter post by Bitfinexed, the weakness reportedly allowed users to manipulate the price of certain cryptocurrencies by flooding the platform with buy requests. Known technically as spoofing, the process allows fraudsters to “stuff an orderbook” with millions of fake orders by using multiple accounts. Placing orders and not fulfilling them can affect the price of an asset, thus allowing scammers to turn the price of a crypto in their favor.
A Blackeye for BitMEX
In response to the news, BitMEX tweeted that it had been experiencing WebSocket issues which had disrupted normal service.
“We have been experiencing WebSocket issues. We have since resolved this issue and continue to monitor on our side. Please note that a disconnected WebSocket can potentially display a zero account balance and we ask users to be patient while their WebSocket reconnects,” the company tweeted on October 8.
The incident will prove to be a black eye for BitMEX, but it doesn’t appear to have hurt the price of LTC. Although recent days have seen the value in USD take a hit, the token has been bullish over the last month. After dropping below the $50 mark, Litecoin is now looking to make a break above $60. If a scandal can’t reverse the trend, the evidence would suggest that now is a good time to buy LTC. Of course, those tracking the 2018 movements of Litecoin will know not to let an isolated upswing get their hopes up. Indeed, recent months have seen Charlie Lee’s creation bounce up and down multiple times.
Litecoin’s Legacy Keeps it Afloat
However, there appears to be something in LTC that’s keeping investors interested. The news that Facebook had reversed its decision to ban Litecoin adverts was certainly a positive. As was the announcement that Lee was working with HTC and, by association, helping align the two companies. But are these developments really enough to keep Litecoin ticking over? Possibly not. The real reason people are still interested in the price of Litecoin is its reputation.
Yes, the off-chain lightning payment dynamic is Lee’s way of making transactions more efficient. However, what investors are really buying into is LTC’s legacy. Compared to other cryptos that are relatively new and untested, Litecoin has been around the proverbial block. In a world of instability, this type of thing counts. Therefore, even if everything else around it is falling apart i.e. BitMEX, people can still be confident in Litecoin’s credentials. Although this alone may not push its value beyond the $100 mark by the end of 2018, it is the reason people aren’t as quick to write-off Litecoin as they are other cryptocurrencies.