Litecoin Surges, Then Plunges After Fake News

September 13, 2021

Litecoin went on a roller coaster ride on Monday after a fake press release announcing a partnership with Walmart was released and then retracted. The cryptocurrency surged as much as 33% before giving back all of those gains in a span of one hour.

 

Litecoin Intraday Price

Source: Bloomberg

 

The fake press release sent out by GlobeNewswire was picked up by dozens of media outlets and included quotes from Walmart CEO Doug McMillon discussing how the largest retailer in the U.S. would begin accepting Litecoin as a form of payment at all of Walmart’s e-commerce properties.

Soon after the press release hit the wires, a Walmart spokesperson denied the authenticity of the announcement.

So too did the official Twitter account for the Litecoin Foundation, a nonprofit organization that advocates for the use of Litecoin and financially supports the core development team of the Litecoin protocol.

 

 

Similar To Bitcoin

Litecoin is a fork of Bitcoin and offers similar properties, such as capped supply and a proof-of-work consensus mechanism. However, Litecoin is designed to process transactions around four times faster than Bitcoin, making it better suited for small value payments.

Created in 2011, Litecoin was released about three years after Bitcoin, at a time in which cryptocurrencies were still unknown to the broader world.

For much of its history, it was one of the largest cryptocurrencies by market cap, but it has fallen under the radar more recently as excitement within the crypto community has shifted over to smart contract platforms like Ethereum and Solana, as well as the applications and digital assets that are built on top of them.

As of this writing, Litecoin had a market capitalization of $12.1 billion, according to CoinMarketCap, making it the 14th-largest coin. However, prices for the coin are still well off their all-time highs struck in 2017 and again this spring.

 

 

Be Vigilant

This latest episode in Litecoin adds fuel to some skeptics’ views that the cryptomarkets are prone to manipulation. Securities and Exchange Commission Chairman Gary Gensler likened parts of the crypto space to the “Wild West” last month, and it’s these concerns about manipulation that have dissuaded the SEC from approving a bitcoin ETF over the past several years.

Others argue that while scams and manipulation exist in parts of the crypto space, well-established coins with deep and liquid markets—like bitcoin, ether and even litecoin—don’t fit in that bucket.

After all, it was seemingly whoever sent the press release or allowed it to go out that was at fault in this instance. Moreover, there have been similar scams with U.S. stocks; the dissemination of fake news to manipulate asset prices isn’t something necessarily unique to crypto.

Still, today’s events are a reminder to be especially vigilant when trading in the nascent crypto space. Litecoin and bitcoin may be well-established, but plenty of other coins and tokens aren’t.

There are plenty of bad actors willing to exploit investors’ enthusiasm about crypto to make a quick buck.

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

Find your next ETF

Reset All