By CCN Markets: Year-to-date, litecoin price has increased by 357 percent against the U.S. dollar, outperforming every top ten crypto asset in the global market including bitcoin, Ethereum, and EOS. The consistent increase in the value of the crypto asset is said to have been…
By CCN Markets: Year-to-date, litecoin price has increased by 357 percent against the U.S. dollar, outperforming every top ten crypto asset in the global market including bitcoin, Ethereum, and EOS.
The consistent increase in the value of the crypto asset is said to have been triggered by the anticipation of its block reward halving that is expected to occur in about two months.
Crypto assets based on proof-of-work (PoW) blockchain networks that involve mining in the likes of bitcoin and litecoin go through a mechanism called halving every four years, an event that reduces the rate of the production of the assets by miners.
Litecoin is the only major crypto asset to match the performance of bitcoin since the 2017 bull market.
Subsequent to achieving an all-time high at $20,000, the bitcoin price has dropped to $8,000, recording a decline of around 60 percent. Litecoin, with its recent recovery, has minimized its loss from ATH to 61 percent, closely following the performance of bitcoin.
Other major crypto assets such as Ethereum, XRP, Bitcoin Cash, and EOS are down 72 to 88 percent against the U.S. dollar from their record highs, falling behind bitcoin and litecoin in terms of performance since all-time high.
Although fears of a correction have intensified in recent weeks following the showing of an extended period of stability by bitcoin and the large gain recorded by litecoin in the past several months, traders remain optimistic about the block reward halving.
Sasha Fleyshman, a trader at Arca, stated that investors should not underestimate the power of a block reward halving as a fundamental factor of a crypto asset’s long term trend.
“Never underestimate the power of a block halving. It is the most fundamentally sound event in Crypto history. See: 2012/2016 for BTC, and 2015/2019 for LTC,” he said.
Spencer Noon, an investor at DTCC Capital, cited the strong hash rate of the Litecoin blockchain network and extended periods of solid performance as catalysts of the asset’s momentum.
“Investors commonly deride LTC as being utterly worthless, but however you feel about its fundamental value, its track record as an altcoin is kinda unassailable: 1. Hash rate ATHs 2. 3rd hardest PoW coin to 51% attack 3. Many periods of strong performance. It refuses to die,” said Noon.
In early June, as reported by Franklyn Richards, an early team member of Litecoin, the hash rate of the Litecoin blockchain network achieved a new all-time high.
With the release of more sophisticated mining equipment and halving on the horizon, Richards suggested that the hash rate of the Litecoin blockchain network is likely to increase in the near to medium term.
“With the upcoming halving, mining rewards are set to halve for the second time in Litecoin’s history from Ł25 to Ł12.5 which will have a profound impact on the mining space. Logically it should result in a halving of the hashrate along with it, however if the L5 is released it would allow the network to recover quicker due to increased efficiency and reduced overheads assuming the market price doesn’t take a sharp decline during this time,” wrote Richards.
Litecoin is being driven by clear fundamental factors rather than technical factors. Hence, while many investors expect the asset to endure a pullback considering its recent performance, the general sentiment around the asset remains overwhelmingly positive.
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This article was edited by Samburaj Das.
Last modified: June 12, 2019 4:32 AM UTC