As Litecoin’s halving nears, many speculate that its price may crash, but why would that happen and what are the alternative scenarios? One thing is for certain, LTC pairs are definitely in for major volatility on as the halving takes place on August 5th. The Litecoin block mining reward halves every 840,000 blocks, the coin reward will decrease from 25 to 12.5 coins.
LTC Halving Loading
For most analysts, Litecoin will crash – not spike – ahead of the upcoming halving event as LTC has already begun to show signs of weakness. Last week, LTC led a massive crypto-sell off after a number of U.S. officials slandered bitcoin and Facebook’s yet-to-be-launched Libra. After posting a 2019 high of $146 on June 22nd, Litecoin has plunged to a low of $78.38 on July 16th. That’s a drop of over 53% in less than a month!
Is Litecoin Just Out of Steam?
LTC went on to recover some of its losses but with the halving due to take place in less than 13 days, Litecoin could see a new bottom making it perhaps a good time to buy on dips. But apart from the apparent bull run exhaustion of the coin. Why would a normally bullish event cause LTC to actually edge higher upon halving?
Miners Could Stop Mining
Litecoin (LTC) creator Charlie Lee has predicted that miners may actually hit the breaks after the coin’s upcoming halving this summer. In an interview with Australian crypto news site Mickey on July 10, Lee reflected on the possible implications for Litecoin’s mining ecosystem when the planned halving kicks in and current block rewards on the network are reduced by 50%. “It’s always kind of a shock to the system,” he said, explaining:
“When the mining rewards get cut in half, some miners will not be profitable and they will shut off their machine. If a big percentage does that, then blocks will slow down for some time. For Litecoin, it’s three and a half days before the next change, so possibly like seven days of slower blocks, and then after that, the difficulty will readjust and everything will be fine.”
Have the Bull Already Run Their Course
Given that the reduction of mining rewards reduces the cryptocurrency’s supply, the anticipation of the halving is generally thought to be accompanied by a corresponding price appreciation — but Lee gave a more nuanced perspective of how supply, demand and market sentiment interrelate:
“In terms of the price, the halving should be priced in because everyone knows about it since the beginning. But the thing is people kind of expect the price to go up. So a lot of people are buying in because they expect the price to go up and that’s kind of a self-fulfilling prophecy. So, because they’re buying in, the price does actually go up.”
When it comes to the actual halving period, however, no mining would lead to slower blocks which would, in turn, dampen demand and actually cause the LTC price to drop – at least according to Lee.
Sources: Coin Telegraph, Coin Market Feed, Investing, 12:05 GMT, Jul 18START TRADING NOW
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