Litecoin News, Price Analysis

Do not Expect Litecoin Prices To go Up; here’s why

It is only four days until the Litecoin halving occurs. After the 5th of August, the reward that Litecoin miners will receive for mining one block will be cut into half; from the current 25 coins to 12.5 coins. Should we expect Litecoin prices to increases or not? I guess not.

Here’s why the Litecoin prices won’t increase

Litecoin was developed to function the same way as Bitcoin does but at faster speeds. It has faster throughputs, and its transaction fees are lower compared to Bitcoin’s. Litecoin however follows the same system as Bitcoin when it comes to halving; rewards are cut into half, and as a result, the number of coins released reduces.

It is important to note that the number of blocks to be mined after the halving will not change. Miners will still be able to mine two blocks in every five minutes just like it is currently. However, the decline in block reward will reduce the number of Litecoins created.

In a normal economic situation, the fewer number of coins would decrease the supply while demand remained constant hence a price increase. However, this might not be the case during the upcoming halving, and the Litecoin founder and CEO Charlie Lee already hinted that prices would not go up.

History also shows that it is unlikely for the price of the coin to rise after the halving. Before August 2015, when the first Litecoin halving occurred, investors had anticipated that prices would shoot up after the halving, and that led to a 350% price increase. However, the price took a retreat after the block reward halved.

The same case has happened this year with LTC having increased in value by over 445% this year, from $30 to highs of $146.43. At the time of writing this, LTC/USD pair trades at $96.81, which represents a 33.7% drop already. If history repeats itself, the prices are not going to go up any further.

It is important to note that Charlie had already sold all his LTC coins in 2017 and the upcoming halving would not affect him.

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coinmag

Daniel is an experienced writer with a keen eye on emerging technologies. He aims at educating the crypto community on the developments within the space.

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