In less than a month, the halvening event of the fourth biggest cryptocurrency in terms of market capitalization, the silver to bitcoin’s gold, Litecoin (LTC), is going to happen. As per the official post made by the company, the next halvening event is due on August 5, 2019. With the halvening event less than a month away, bulls are now expecting a strong upward movement from the digital asset in terms of its price. Why? Because the supply is about to be cut short!
At the time of writing, Litecoin is standing at around $118 while showing a -0.31% change in its price over the past 24 hours.
Litecoin uses pretty much the same mining algorithm as bitcoin. It uses a proof-of-work (PoW) algorithm at its core called Scrypt. Through this algorithm, a block is mined every 2.5 minutes in the Litecoin ecosystem unlike bitcoin’s 10 minutes and miners are given rewards in the form of newly-minted Litecoin, a number which currently stands at 25.
The halvening event is now expected to curb this reward to 12.5 and as the supply of an asset decreases in the market, its value tends to increase. The main reason for the cutting down of rewards is to tackle the problem of inflation that has plagued the current banking system of the world.
When the last halvening event occurred on 25th August 2015, the digital asset had seen a staggering 400% surge in its price in the month leading up to the event. If past behavior is to be expected again, a huge spike in price might just be incoming once again. This time around, the crypto space is also much more developed and there is more acceptance of cryptos than before.
The official post states:
“Comparatively speaking, if history is anything to go by, we should have already seen an unhealthy vertical spike in price as people FOMO in to capitalise on the event, yet this hasn’t happened. The price has certainly pulled back hard against bitcoin, sitting at around 0.0108 but has remained steady in dollar terms. It would appear then Litecoin’s next move has become more closely tied to that of bitcoin as it has been rising and dipping along with it.”
As highlighted here, Litecoin’s recent performance had a lot to do with how bitcoin performed in the market. Since bitcoin has the highest market capitalization volume, its price trend usually tends to drive other cryptos along with it, although Litecoin has outperformed bitcoin in terms of the price rise, since January.
Treading at around $30 at the beginning of this year, Litecoin is now touching $120, a 4X increase in its value. Litecoin’s growth in the market this year can be associated with its upcoming halvening, although bitcoin also had its role in building a bullish ecosystem.
For bitcoin, the rise in price has been around 200%. Still, the current value is below the $140+ peak that Litecoin saw recently. Bitcoin correction from $13,800 to the current $11,898 can be associated with Litecoin to explain its drop to the $120 mark as well.
For the biggest crypto boss floating around, bitcoin, the halvening event is expected to come in May of 2020. It is also expected to have to same bullish effect on bitcoin’s price as it is going to have for Litecoin. Bitcoin has already gained a strong upward thrust as compared to lows that were seen at the beginning of the year. It is quite possible the recent spike above $10k might just be seen in hindsight of the upcoming supply cut.
As halvening approaches, bitcoin price is expected to rise and it might even cross its all-time high (ATH) price. For now, its Litecoin’s turn. Let’s see how the asset behaves over the next few weeks. This will give an insight into how its big brother bitcoin will likely behave next year.