On August 5, the halving will occur in the Litecoin network on block 1680000, as a result of which the miners' reward will be halved. Instead of 25 LTC, miners will receive 12.5 LTC for each new block.
Some experts believe that the decrease of the miners' reward, as during the previous halving, will force the price of the fifth cryptocurrency capitalization to rise upwards. However, the founder of the project, Charlie Lee, does not believe that the rise in the price of a crypto asset is guaranteed. I’m going figure out how the upcoming update will affect on the price of "digital silver", as well as what the founder of Litecoin says about the upcoming halving.
Litecoin is one of the oldest altcoins on the crypto market, whose network was launched in October 2011. For a long time, Litecoin had the second largest cryptocurrency capitalization, for which it received the name "digital silver".
Litecoin blockchain is a fork of the Bitcoin network, in connection with which it is arranged in a similar way, but it has some differences. For example, instead of the SHA256 encryption algorithm, Litecoin uses SCRIPT, which allows to generate blocks about four times faster - 2.5 minutes compared to 10 minutes in the Bitcoin network. Nevertheless, many members of the crypto community expect Litecoin halving to have the same effect as Bitcoin halving, which is considered to be one of the reasons for the current increase in capitalization of the first cryptocurrency. This is confirmed by the fact that the previous Litecoin halving, which took place on August 8 2015, at block 840000, had a positive effect on the asset quotes: then the LTC price increased by 400% - from $ 1.7 to $ 8.5.
Will there be growth after the 2019 halving?
It can be expected that people under the influence of FOMO (“Fear of missing out”) will actively buy LTC. Thus, Litecoin network miners are already showing remarkable activity in order to manage to get more coins before the mining remuneration drops - on July 14, the network hashrate reached an absolute maximum in the entire history of cryptocurrency.
At the same time, technical analysis of the price of a crypto asset forces potential buyers to be slightly alerted.
The graph shows that Litecoin's historical price maximum of $ 366 was reached in December 2017, which is more than four times the current price of a crypto asset - $ 78. At the same time, the price minimum of $ 24 was recorded a year later - on December 2018. After that, by June of this year, the price of cryptocurrency increased by almost 500% - to the level of $ 142.
I remind you that the previous halving in 2015 gave “digital silver” a 400% price increase. It is noteworthy that even now compared to December 2018, Litecoin has already grown by almost 300% - from $ 24 to $ 80. During the same time, the daily trading volume of LTC increased about ten times - from $ 300- $ 700 million in December to $ 3- $ 5 billion in July of this year, and the asset capitalization was $ 5.6 billion.
Such price indicators raise doubts about the significant increase in LTC prices and, according to the rule for traders, “buy on rumors, sell on news”, rather hint at a possible sale of cryptocurrency. Moreover, Litecoin has already dropped below the key support line at $ 92 and may roll back to the next, at $ 72.
Of course, the rate of LTC, like all other Altcoins, primarily depends on the rate of Bitcoin and the demand for it. And given the fact that in the current phase of the market, the growth of BTC does not lead to a strong increase in prices for the main altcoins, then the forecast for the LTC price is pessimistic.
Miners need LTC price increase
On the other hand, in order for mining in the Litecoin network to continue to be profitable, an increase in the LTC price is necessary. In addition, a self-fulfilling prophecy about the upcoming price increase of an asset may also push the market upwards. Moreover, a significant proportion of LTC is under the control of large mining pools that are interested in increasing the price of the cryptocurrency.
Litecoin founder Charlie Lee said in an interview with Australian cryptocurrency resource Micky: "Halving is always a shock to the system." Lee believes it is likely that some miners would prefer to turn off. In this case, the project founder predicts a temporary decrease in the hashrate, which will lead to a decrease in the speed of confirmation of transactions before the complexity of mining will be corrected. Presumably, on the Litecoin network, it will take about a week.
At the same time, the founder of Litecoin gave a controversial forecast about the future price of the cryptocurrency. On the one hand, he believes that everyone knew about halving from the very beginning, which means that its consequences have already included in the current LTC price. At the same time, Lee stressed that the effect of a self-fulfilling prophecy about the upcoming increase in the price of Litecoin would cause a further upward movement of its price.
Among experts and journalists, there are many supporters of both one and the other theory, and today there is no unambiguous position about the future of Litecoin price.
