As the cryptocurrency market continues to evolve, LTC has experienced a 7% increase in its price over the last 24 hours, gaining attention from investors and enthusiasts alike. This boost has been attributed to the upcoming network halving in August, as well as a significant rise in activity since April. Boasting a 7.5% increase in the past 30 days, Litecoin has outperformed its counterparts including BTC and ether.
Though the looming network halving plays a vital role in LTC’s recent price surge, some analysts believe that the event is advantageous for both the network and LTC’s price. Similar to bitcoin’s scheduled halving, Litecoin’s halving will result in a 50% reduction of block rewards received in LTC. This has led to an increase in investors seeking to position their assets strategically ahead of the halving, drawn to Litecoin’s lower unit costs in comparison to bitcoin, according to Charles Storry, the head of growth at a crypto index platform, Phuture.
Aside from the halving event, Litecoin has also benefited from the current congestion in the Bitcoin network. The surge in activity is primarily due to the Ordinals protocol, resulting in higher transaction costs and processing time. According to Brent Xu, CEO and co-founder of Umee, “Litecoin, in a sense, is an old-school clone of BTC and in turn, serves a similar purpose.” He added that Litecoin’s current rise in transactions serves as a temporary alternative during BTC congestion. However, Xu also cautions that this has happened before and may not guarantee long-term sustainable growth for LTC’s performance.
Meanwhile, some experts argue that the halving event is already influencing the current price performance. Nauman Sheikh, Head of Protocol and Treasury Management at Wave Digital Assets, disclosed a 30% increase in open interest for Litecoin futures and perpetual contracts during the last week of May.
While optimism runs high for Litecoin enthusiasts due to its recent performance, it is crucial to acknowledge the inherent risks and uncertainties in the cryptocurrency market. Though the halving event and Bitcoin’s congestion provide short-term benefits to Litecoin, it is essential to monitor its performance over time and evaluate the potential long-term effects on the market.
Source: Coindesk
