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Is The Litecoin Halving Next Month A Bad Thing?

Cryptocurrency

Litecoin has been generating news, both positive and negative, due to it’s upcoming Halving next month. The halving is expected to take place early next month and reduce the rewards from 25 LTC to 12.5.

Most of the media, even Charlie Lee himself has gone on record to say that the price of Litecoin is expected to drop sharply after the Litecoin halving, due to the fact that miners might not find it to be profitable anymore, since running a mining rig is often expensive. It’s a common notion that the halving of block rewards causes prices to increase. The logic is sound, but if the miners earn fewer coins, the supply of coins will eventually decrease, assuming the amount of people buying it remains the same, the price should most definitely go up.

Litecoin has seen phenomenal growth since December 2018, where it started its journey at $22, going as far as $130 last month, being one of the few coins to see larger growth than Bitcoin. A startup that specializes in engineering and operating trading algorithms for the cryptocurrency market. They have been working on analyzing multiple different halvings across 24 cryptocurrencies and compared them to the overall market benchmark. The coin was evaluated 6 months before and after each halving, compared to other cryptocurrencies not going through a halving event in the same timeframe.

They realized that the halving event results in no abnormal pricing action. There was no evidence that cryptocurrency assets experiencing a halving event outperform the broader markets in the months leading up to and following a reduction in miner rewards.

Cryptocurrency is a world without a central regulatory body, who can not control the price of the digital money, which leads to people and speculation being the driving force for cryptocurrency. It’s probably not true that the cryptocurrency market is hugely affected by events like a halving, but it’s always volatile and things are always changing. This report simply states that there has been no precedence so far, it is up to traders to come to their on conclusions and decide what works best for their portfolio.

Disclaimer - OBN is an informational website which aims to give the latest blockchain related news to the readers. Articles on OBN should not be considered as investment advice. Trading cryptocurrencies is a high-risk investment, every user is advised to consult an expert before making any decisions.