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Litecoin jumped and plummeted by 20% in the face of a Global Newswire controversy which could be part of a larger pump and dump scheme.
A fraudulent press release claiming that Walmart had entered into a partnership with cryptocurrency Litecoin has made the alt token fluctuate wildly. Walmart is far from the first large retailer being rumored to pick up a cryptocurrency partnership, as Amazon continues to flirt with the idea of allowing payments through a blockchain and SpaceX accepting cryptocurrencies for their satellite advertising project. The benefits of allowing crypto payments over standard currency (or fiat) payments include faster transaction times, much lower transaction fees when transferring money, as well as no conversion charges when spending in a foreign country. Downsides to using cryptocurrencies in the place of traditional payments include the impact of crypto mining on the environment, a lack of regulation in most markets, and high price volatility.
Litecoin is a well-regarded altcoin due to its incredibly low transaction fees and having some of the fastest payment speeds of any cryptocurrency — four times faster than Bitcoin for example. It also boasts heightened security compared to a lot of its crypto contemporaries. Litecoin was started in 2011 as an alternative to Bitcoin and by 2013 reached a market cap of $1 billion. It costs less to mine compared to other, more pricey cryptocurrencies. From the offset, it is easy to see why Walmart would supposedly adopt the crypto heavy hitter.
As reported by CNBC – a press release sent out by Global Newswire stated that Walmart had adopted Litecoin as a means to make transactions with the retailer. The story was picked up and reported as fact by several large outlets. According to multiple Twitter users, the supposed news was even picked up by Litecoins official Twitter, further adding to false reports. Global Newswire then sent out a notice telling readers to disregard the previous news. As a result of all the commotion, Litecoin’s price increased by roughly 20% and then quickly dropped by the same amount, whereas Walmarts stock hardly moved at all. Such fluctuations are common in the cryptocurrency market but rarely are these notable.
How Did This Happen And Why?
The situation is now being investigated by Walmart and led to an official statement from the Litecoin Foundation, further damning the initial release. Creator of Litecoin, Charlie Lee, will be on Bloomberg at 2 PM PST to address the situation. This has made some question how Global Newswire got the fake press release and whether it was either a prank or a larger, more nefarious pump and dump scheme. Several high-level Litecoin transactions took place around the time of the spike. The Securities and Exchange Commission has remained tight-lipped over whether they will be investigating the fraudulent release.
Walmart continues to use regular currencies for people’s everyday grocery shops and Litecoin continues to be one of the more stable cryptocurrencies on the market. This could change in the future, should Amazon or another big retailer eventually adopt the emerging technology. Until then people will be wondering when it might happen, and what token will be the first to be used for standard retail.
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