Walmart Hoax: The Brief Rise and Fall of Litecoin
After an apparent ‘pump and dump’ scheme fooled the media, people are asking whether or not to trust crypto… again.
Originally published on Zinvest: zvstus.com/blog/walmart-hoax-litecoin-twitter
On Monday, GlobeNewswire released a fake press release stating that Walmart and Litecoin (LTC) have begun a partnership.
The claim later discovered to be a hoax, briefly boosted Litecoin by nearly 30% before tanking back down.
What is Litecoin (LTC)?
For those new to cryptocurrency, Litecoin is a lighter and quicker version of Bitcoin. It was created in 2011 by former Google engineer Charlie Lee, who built it using Bitcoin’s source code.
As the name implies, Litecoin is meant to be a “lighter” version of Bitcoin and has been called the “silver” to Bitcoin’s “gold”.
The peer-to-peer cryptocurrency was developed to be 4x faster in producing blocks and also allows for 4x the coin limit. Litecoin also utilizes Scrypt, a hash function introduced to make mining more accessible to hobbyists.
Currently ranked as the 16th most valued cryptocurrency on the global market, Litecoin is also used as a testing ground for Bitcoin software updates due to its agility and complementary nature.
It is also considered the first successful alternative cryptocurrency (altcoin).
News Spread and Litecoin Soars… and Drops
GlobeNewswire, a press release distributor owned by telecommunications company Intrado, published a release titled “Walmart Announces Major Partnership With Litecoin (LTC)”.
This immediately gained traction as multiple news outlets picked up the story and generated buzz within the investing community. The story was even tweeted by Litecoin Foundation’s Twitter account which added more fuel to the fire.
Litecoin quickly soared as high as 30% and rallied from $174 to a high of $233 per coin. It had a market capitalization of $11.8 billion with the hoax boosting approximately $4 billion to that value.
However, this was short-lived and the cryptocurrency was knocked back down once Walmart issued their own notice in response to the news.
The statement reads, “Walmart had no knowledge of the press release issued by GlobeNewswire, and it is incorrect. Walmart has no relationship with Litecoin.”
Litecoin Foundation then scrambled to officially tweet their own statement confirming that they have “not entered into a partnership with Walmart of any kind”. Litecoin also admitted that a member of their social media team “was a little too eager” and shared the story to the official account without fact-checking.
This story was quickly deleted prior to their statement.
GlobeNewswire published a notice as well to disregard the false press release. The company claimed that a fraudulent user account was used to publish the release.
A spokesperson stated that “This has never happened before and we have already put in place enhanced authentication steps to prevent this isolated incident from occurring in the future. We will work with the appropriate authorities to request — and facilitate — a full investigation, including into any criminal activity associated with this matter.”
Of course, this whole fiasco was met with criticism, with many pointing out that several news outlets spread the story without confirming with Walmart. Speculations that this was all part of an elaborate “pump and dump” scheme soon began to circulate within the cryptocurrency community.
A pump and dump is a manipulative scheme that aims to boost the price of a stock through fake recommendations or misleading and exaggerated statements. This allows scammers to buy an asset and quickly sell it off once the price starts soaring.
In general, pump and dump schemes usually target less-regulated markets, including cryptocurrency.
It’s unclear who exactly was behind this chaos and as Neeraj Agrawal, communications director at Coin Center, puts it: “Cryptocurrency is an extremely adversarial environment. News, be it good or bad, should always be verified at the source.”
Bigger Things on the Horizon?
While the false press release may have brought Litecoin back to Earth, things are still looking up for the cryptocurrency.
AMC CEO Adam Aron recently announced in the second-quarter earnings call that the company will begin to accept cryptocurrency — notably Bitcoin, Bitcoin Cash, Ethereum, and Litecoin — as an alternative form of payment for online ticket and concession purchases. Cryptocurrency enthusiasts can expect this rollout by year-end 2021.
Currently, these crypto options have all seen a rise in trading:
- Bitcoin sees a slight rise in trading at about $48,000 per coin.
- Bitcoin Cash is also up slightly at $640.81 per coin.
- Ethereum has boosted up 6%, trading about $3,600 per coin.
- Litecoin has jumped up 5%, trading about $190.75 per coin.
The decision to begin accepting cryptocurrency is in part due to them becoming more mainstream and being integrated into payment methods for daily life. It’s obvious that cryptocurrency is here to stay and may continue to grow even bigger in the future.
Perhaps a ripple of more companies will begin to accept cryptocurrency but at the same time, potential regulations might become stricter as its value grows.
Either way, we’re all here for the ride. For more information on cryptocurrency and the world of investing, check out our guides and related news.
