At press time, bitcoin is trading for well above $8,800. The currency has gained more than $1,000 over the past week and has been on a roll since early April of this year, when it struck the $5,000 mark for the first time in about five or six months. The granddaddy of all cryptocurrency is doing quite well for itself in 2019, but it’s Litecoin that’s ultimately stealing the main spotlight.
Litecoin Is Exploding Like Nobody’s Business
Litecoin currently stands as the sixth-largest cryptocurrency by market cap and was invented by Charlie Lee. The currency peaked in January of 2018 at more than $400 per coin, but like all its digital counterparts, it entered a long series of price falls just weeks later. However, it is estimated that the currency has gained more than 330 percent since the beginning of the year. Much like bitcoin, the currency is exploding as of late and arguably outdoing all other cryptocurrencies in the space, including Ethereum and Ripple’s XRP.
At press time, it appears Litecoin is trading for nearly $138. Many analysts attribute its sudden gains to a halving that’s set to occur during the second half of the year. This process will make it so that the amount of new coins Litecoin miners earn when they perform their jobs will be cut in half. Currently, miners earn about 25 new coins each. The halving will make it so that they only earn 12.5.
This means that less coins will be extracted once the halving occurs. Analysts believe this will prevent an “erosion of value” and reduce the amount of coins in circulation, making Litecoin somewhat rarer and thus more valuable.
Mati Greenspan of e-Toro fame states:
Every time we’ve seen a halving even in bitcoin or Litecoin, the price has risen astronomically, so if that pattern continues, what we’ve seen so far is small potatoes in comparison. This is quite normal for the crypto market.
Others say that it’s not the halving that’s making the Litecoin magic happen, but rather the price of bitcoin. Investor Aaron Brown states that Litecoin typically does well when “bitcoin is doing well,” and as the leader of crypto has been enjoying a solid rally for the past two months, Litecoin is following suit. Discussing Litecoin, he claims:
It’s an established, convenient transaction currency well suited to a world in which bitcoin is the store of value. I don’t think it has much value in a world in which bitcoin prices are low.
A Halving Can Have Big Effects
President of crypto hedge fund ProChain Capital David Tawil says:
Is it reasonable to think that this halving, this catalyst, should allow Litecoin to reach it’s previous highs? I think so. I think it could… It’s a good potential trading opportunity.