The last couple of weeks in the cryptocurrency market have been brutal. Nearly every investor has been having a emotional rollercoaster regardless of what coin they have invested in, but the LTC investors are probably the most hopeful of the bunch.
Everybody met the new bullish market with gusto, preparing to make gains similar to the ones made in 2017, but their hopes were quickly cut short when Bitcoin stopped moving at the $9,000 and started to fall rapidly.
Although it’s mostly accepted that a falling market is one of the best things a trader can see with an asset as volatile as cryptocurrencies, many traders opted to simply close their positions or get rid of their coins while they still could.
All except for one. The LTC retail, as well as the increased number of institutional investors, are holding on for dear life on their currently existing coins, simply due to the fact that everybody is waiting for a very specific event this September.
The Litecoin Halving
Litecoin will experience a halving in early August.
So, what’s a halving?
It is an event when the number of coins rewarded to people for mining a single block in the LTC blockchain is halved. Right now the reward is 25 coins per block, in three months it’s going to be 12.5 coins per block, why does this matter?
Imagine that you’re sitting at your job and your boss comes up to you and tells you.
“I’m cutting your salary by half, but all the work will remain the same, and will become harder and harder over time”
What would you do at that point? You’d immediately quit, right? That’s what LTC miners could do when the halving occurs, but the good news is that they are the market makers themselves.
In order for them to remain in business, 12.5 LTC in September 2019, need to be equivalent to 25 LTC today. So many experts think that 100% appreciation is to be expected.
However, many experts believe that a 50 or 60% increase is much more likely.
When the halving happens, it’s expected to have around 23 million new coins emitted into the market, so that the demand does not outpace the supply too much. Although it will not be enough to contain the price.
Currently, there are 62 million LTC in circulation, 21 million is around 30% of that number. Therefore if we do a bit of calculation, we come up to around 50 or 60 per cent consolidation due to supply and demand shifting.
How is the market preparing?
Although it was expected that nearly everybody would cash in with Litecoin at the moment of the announcement, the price actually went down. It’s not known whether or not it happened due to bears hitting it with all they had in order to achieve a perfect entry point, or if it was due to the Bitcoin volatility that week.
Nevertheless, the more Litecoin grows before the halving, the more it will achieve at the end beginning of August. Experts are currently agreeing on $300 per coin at the start of September, but all of that depends on the miners themselves.
For example, if the number of miners remains the same, the coins are going to increase slightly, however, if the number of miners decreases, that means the supply decreases as well, which will boost the price of LTC to unimaginable proportions. Therefore we have exactly three factors to look forward to:
- How LTC performs before the halving
- How LTC performs during the halving
- And what the miners will do after the halving
The fate of millions of LTC holders now rests on the shoulders of the answers to these three dilemmas.