On-chain data shows a growth in Litecoin activity, suggesting that Bitcoin investors may be using LTC for taking advantage of its cheap transfers.

Litecoin Addresses With 1,000 Or Less LTC Have Been Accumulating

Recently, the transaction fees on the Bitcoin network have shot up as a result of the high amount of activity that the blockchain has been facing. This activity has mainly come due to the emergence of the BRC-20 tokens, fungible tokens created on the chain using the Ordinals protocol.

A large number of meme coins have popped up that utilize this technology (including Pepe Coin (PEPE), which has gained extremely rapid traction), so the chain has been observing a high number of transfers.

In times of network congestion like these, investors have no choice but to pay high amounts of transaction fees if they want to have any shot at getting their transfers processed quickly.

Normally, investors find it okay to pay the slightly higher fees whenever the mempool waiting times stretch longer, but this time, the congestion has been of historical levels so the competition to get transactions confirmed is extremely high, something that has resulted in an explosion in the fees.

Because of this, it doesn’t seem unexpected that some of the holders who want to make fast transactions would at least temporarily migrate to other blockchains. According to data from the on-chain analytics firm Santiment, Litecoin seems to be one of the beneficiaries of this recent congestion on the Bitcoin network, something that’s not surprising as the network is known for its negligible fees and fast transactions.

One of the main pieces of evidence of this can be found in the daily transaction count of the blockchain.So here is a chart that displays the recent trend in this LTC indicator:

Looks like the value of the metric has been quite high in recent days | Source: Santiment

As displayed in the above graph, the total number of Litecoin transactions taking place on the blockchain has seen a significant surge recently. The timing of this increase would match up with the congestion on the Bitcoin network, so it seems like a reasonable assumption that the two have some correlation.

Another change that has happened on the LTC network is visible through the supply held by the investors in the 0-1,000 coins group (that is, the holders who have a wallet balance in the range of 0-1,000 LTC), as the below chart highlights.

Litecoin Accumulation

The value of the metric seems to have been going up recently | Source: Santiment

From the graph, it’s visible that these small Litecoin holders have observed their supply rapidly increasing in the last week or so. This suggests that these retail investors have been accumulating recently.

The chart also contains the data for the supplies held by the 10,000-100,000 coins and 100,000-1,000,000 coins groups. These cohorts correspond to the sharks and whales, and it appears that these humongous investors have barely seen any significant fluctuations in their supplies during this period.

This may imply that only the small investors are migrating from Bitcoin to Litecoin, as the benefits of a lower transaction fee would be much bigger for holders making small payments, while entities like the sharks and whales would have volumes so large anyways that even the high fees would make a minuscule dent on them.

LTC Price

At the time of writing, Litecoin is trading around $80, down 6% in the last week.

Litecoin Price Chart

LTC has gone down in the last few days | Source: LTCUSD on TradingView

Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, Santiment.net

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