You might be surprised to find out that, through the first two months of 2025, one of the best-performing major cryptocurrencies was Litecoin (LTC +6.22%). At one point, it was up more than 20%. By way of comparison, Bitcoin (BTC +3.66%) is down nearly 20% from its all-time high of $109,000 in January.
If you're only focused on recent results, you might conclude that now is the time to forget about Bitcoin and buy Litecoin. But there are two big reasons why that would be a mistake.
Litecoin ETF hype
The primary reason why Litecoin pushed higher in January and February was due to growing anticipation over a potential spot ETF launch in 2025. Two investment firms -- Canary and Grayscale -- have already filed spot ETF applications with the SEC, and all signs point to SEC approval coming as soon as July. Right now, Bloomberg ETF analysts give Litecoin a 90% chance of getting a new spot ETF in 2025.
That makes Litecoin the clear frontrunner right now, in terms of becoming the first cryptocurrency to get a new spot ETF in 2025. Litecoin has now clearly passed XRP and Solana, given the regulatory concerns swirling around those two cryptocurrencies. This Litecoin ETF hype helps to explain why investors have been piling into Litecoin in 2025.
Image source: Getty Images.
But even if Litecoin does get an ETF, will it even matter? Part of the Litecoin ETF hype involves the expectation that billions of dollars will magically start to flow into Litecoin, thereby pushing up its price to stratospheric new levels. After all, this is what we saw with the new spot Bitcoin ETFs. Record-setting new investor flows helped Bitcoin soar in price last year.
However, demand for the new Litecoin ETFs could be underwhelming. Consider what happened with the spot Ethereum ETFs last summer. They over-promised and under-delivered. And Bloomberg appears to acknowledge that the same thing might happen again with the Litecoin ETFs, noting that "demand is comparatively low."
In a best-case scenario, says Bloomberg, $580 million might flow into Litecoin. That was approximately 6% of Litecoin's market cap at the time. According to Bloomberg, that's approximately the same percentage of market cap that is now invested in the spot Bitcoin ETFs.
However, in the case of Ethereum, investor inflows were much more limited. Only 3% -- not 6% -- of market cap flowed into the new ETFs. If we use the same percentage for Litecoin, that means only $290 million might flow into Litecoin.
But what if there's even less enthusiasm for Litecoin than there was for Ethereum? We might be lucky to see $200 million. Making matters more interesting, Litecoin was not one of the cryptocurrencies named to the Crypto Strategic Reserve by President Donald Trump on March 2. That explains why Litecoin took a major nosedive in early March. If the U.S. government is not interested in Litecoin, why should investors be?
All of which is to say: if you're counting on a massive torrent of new money pouring into Litecoin at a time when the overall crypto market is struggling, you might need to reconsider your base assumptions.
Litecoin's history of underperforming Bitcoin
Keep in mind, too, that Litecoin has historically underperformed Bitcoin. In fact, for much of the past three years, Litecoin has gone absolutely nowhere. Since mid-2022, Litecoin has mostly traded under $100, and, until this year, has shown little or no sign of a potential breakout.
CRYPTO: LTC
Key Data Points
Just take a look at this chart for Litecoin over the past five years. You can clearly see a massive rally during the crypto bull market rally of 2020-2021, when Litecoin hit an all-time high of $412. But ever since then, it's been mostly downhill. Even with a modest 20% rally to the $125 level in February, Litecoin was still a whopping 70% below its all-time high. Yikes!
Bitcoin / U.S. dollar chart by TradingView
The picture gets even more concerning when you overlay a chart of Bitcoin during that same time period. While Litecoin largely follows the performance of Bitcoin, the highs are much higher for Bitcoin. And while, yes, Bitcoin did collapse in 2022 just like Litecoin, there's a clear recovery for Bitcoin in 2023 and 2024. Based on this chart alone, I really can't see how anyone would pick Litecoin over Bitcoin.
Don't forget about Bitcoin
I get it. Bitcoin has had a miserable 2025. It's down nearly 20% from an all-time high of $109,000, and seems to be in free fall. It's fallen through the $100,000 price level, the $90,000 price level, and the $80,000 price level. The next major target to take out is $70,000, which is where Bitcoin was trading on Election Day last November.
But please don't forget about Bitcoin. Study after study has shown that, over longer time horizons, Bitcoin is the best-performing asset in the world. If you're giving up on Bitcoin now, after just two months of poor performance, you're likely doing it all wrong. Add in the fact that Litecoin no longer seems to be in the running for the nation's Crypto Strategic Reserve, and the case is very clear now for Bitcoin.
