Litecoin was deemed a commodity today in a CFTC lawsuit filing against Binance.
With the altcoin now potentially safe from further scrutiny from the SEC, a new digital silver narrative could take shape. Here’s why.
Litecoin Officially Labeled A Commodity By US CFTC
The crypto market bled more than $50 billion in market cap today, after it was revealed that Binance and CEO Changpeng Zhao will face legal action from the United States Commodity Futures Trading Commission “over alleged trading and derivatives rules violations.”
According to the filing, the CFTC has explicitly named Litecoin, along with Bitcoin and Ethereum, to be a commodity under their jurisdiction. The CFTC is in charge of regulating commodity futures markets, such as oil, soy, corn, silver, and gold.
In the past, the CFTC has been clear that Bitcoin is a commodity and has also named Ether as such, allowing both to be traded on the Chicago Mercantile Exchange better known as CME.
But the SEC has recently muddied the regulatory clarity around ETH. LTC hasn’t been under scrutiny by the SEC, however, making this latest naming of Litecoin to be a commodity especially notable.
Is Litecoin ready for a major rally? | LTCUSD on TradingView.com
Why The Distinction Could Drive A New Digital Silver Narrative
The CFTC calling LTC a commodity comes as a time when there are more skeptics of crypto than ever before, yet the safer, commodity-like BTC has been thriving in the midst of a banking sector crisis.
In the past, periods of economic distress, high inflation, or war, investors flock to the safety of precious metals like gold. Precious metal are commodities with an extremely scarce supply. Due to this attribute, silver and gold have been used as money throughout history.
The fiat system today exists because gold and silver were easy to counterfeit, hard to transport, and because governments had to keep minting new coins because humans found ways to shave down the metals or lower the actual metal content per coin.
Today, Bitcoin is considered digital gold, but for whatever reason, the digital silver narrative has been all but dead. But with Litecoin now being labeled a commodity, and with investors fleeing from banks to BTC and gold, could we also see a flight to Litecoin and silver? And more importantly, could this reignite the digital silver narrative that propelled LTC to new highs in 2017?
Litecoin technicals have recently begun to teeter into bullish territory, even though altcoins have been struggling to keep up with Bitcoin. LTC being labeled a commodity officially by the CFTC, combined with a network growing faster than even Bitcoin’s is, Litecoin could see a dramatic change in sentiment in the near and long term.
Bernard Baruch famously said “Show me the charts, and I’ll tell you the news.
I’m watching this unfold with #Litecoin right now. The other day, I posted a bullish $LTC chart. I was asked what could cause it. 👉 https://t.co/ENjGbniu4F
— Tony “The Bull” (@tonythebullBTC) March 27, 2023
Follow @TonyTheBullBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com