Most of the altcoins are still dependent on the performance of Bitcoin. Litecoin is the only one that has managed to break away from this loop and continues to rise despite the volatility in Bitcoins price.
On June 12th, Litecoin surged by another 12% leaving its current price at $138.89, the highest its been since over a year. This is almost a 345% increase since its price on New Year’s Day which was at a mere $30.
As CoinMarketCap figures show, it managed to break away from its $120–$125 resistance mark a week ago when it hit $128.
Ever since the halving of Litecoin was announced, it has acted as a catalyst for the increase in its price. A lot of tech analysts are speculating from previous halvings that the price of Litecoin is only going to go up post-halving.
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital said that, “Litecoin’s resilience and the recent surge are attributable to the upcoming halving.”
What does halving mean?
A halving in the crypto verse means that the reward for mining a block will reduce by half. So Litecoin’s current reward of 25 LTC is going to reduce to 12.5 LTC. What this means for miners is that the rewards are going to be halved, this might deem a problem if the price of Litecoin fails to hit new heights because their incentives are going to drastically reduce. So if they stop mining, the network hash rate will drop which means that only mining farms will make up the majority of hash on the network. This will disrupt the decentralization of the Litecoin network.
However, if we look at Litecoin’s halving that took place in 2015, the price increased from around $1.5 in May 2015 to hit a high of $7.00 in July 2015 before falling back to $3.00 post-halving (August 25th). The reason this happened was because traders know that after the halving takes place, the amount of LTC in circulation will be a lesser amount due to the fact that the rate at which LTC is going to be produced is 50% lower. So when there’s more demand and lower supply the price of LTC is going to shoot up. Which incentivizes buying more LTC pre halving.
FOMO setting in for LTC
As Litecoin continues to soar, there’s a lot of FOMO settling in for traders and investors who missed out on the opportunity to invest in its current bullrun. Even Charlie Lee, the creator of Litecoin who has been unusually quiet lately has retweeted things like, “Litecoin is doing so well Craig Wright will soon be claiming he’s Charlie Lee.”
As the halving draws near being only 54 days away, the real question is how much the price of LTC is going to go up by and more importantly how much it’s going to drop post-halving. In either case, we can tell from previous halvings that the price of LTC can only go higher from its current position.