The watchers of BTC investment arena are keeping a keen eye on the performance of LTC, another proof-of-work token, as the reigning cryptocurrency gears for its upcoming “halvening”. For the unversed, “halvening” is a protocol-backed reduction in rewards for miners who successfully solve puzzles and contribute blocks to proof-of-work tokens, such as Litecoin and Bitcoin.
The Litecoin blockchain is about to undergo the halvening process in the successive 21 days, projected for August 1, 2023. This reduction is ingrained to limit token issuance, which has already triggered a spike in Litecoin’s price. The last month observed Litecoin’s prices jumping by 22%, with the 12-month performance boasting of a remarkable 81% increase. This uptick has spurred confidence in Bitcoin investors who foresee a similar upward trend for Bitcoin as its halvening beckons closer, set for April 2024.
Historically, Bitcoin has witnessed an uptick post its halvenings, which take place every four years. The reason for this trend lies deep within the rudimentary economic principles of supply and demand. Fewer new coins leads to scarcity in supply, which, paired with growing demand, propels the price higher. The inaugural halvening in 2012 observed Bitcoin’s price escalate from about $12 to a staggering $260 within a year. Similarly, the next one in 2016 followed suit, with a surge from $650 towards a gargantuan $20,000 by 2017’s end.
The previous halvening, which happened in May 2020, also displayed an ascending price trend with Bitcoin hitting new all-time highs in 2021, though the immediate impact was less dramatic. Since the onset of this year, Bitcoin has portrayed an almost doubles performance, starting at roughly $16,000 and recently oscillating around $30,000.
Requests for a spot Bitcoin ETF are piling up, following an initial filing by the world’s largest asset manager, BlackRock. Other giants such as Fidelity, Valkyrie, and Invesco, have followed suit, adding to the growing list of ETF applications. A significant thrust to both Bitcoin and Litecoin came with the announcement from EDX Markets, a fresh face in the realm of crypto exchanges, which confirmed the inclusion of both of these amidst the four tokens available to its clientele at launch.
Although the confidence-inspiring performance and beneficial policies surrounding Bitcoin and Litecoin makes them sound like future-paved marvels, scepticism remains. As the clock to Bitcoin’s halvening in 2024 ticks away, industry observers will be scrutinizing Litecoin, serving as an indicator of what possibly lies for the most acclaimed cryptocurrency.
Source: Cryptonews
