Litecoin, which has led bullish uptrends in the cryptoeconomy since the start of the year, was at it again on Monday, with the bitcoin spinoff having posted a double-digit percentage price increase for the biggest rally among top coins saw on the day.
Indeed, on June 10th, the litecoin price rocketed up approximately 11 percent, hitting a 24-hour high in excess of $128 USD before settling down above $125. It comes on the heels of LTC gaining around 10 percent, from $109 to $120, last Friday.
That pricing is still a far cry from LTC’s December 2017 all-time high of $375, of course, but the cryptocurrency’s latest spike puts it further in the green from more recent perspectives: the coin is presently up 49 percent on the month, up 128 percent over the last quarter, and up 14 percent on the year.
Litecoin’s Monday performance put the crypto at the front of the market’s top projects for the day. After acutely dropping below $7,500 last week, the bitcoin (BTC) price gained nearly four percent to $7,930. Ether (ETH) gained six percent to reach $244. XRP rose around five percent, hitting $0.396.
Litecoin’s current market capitalization is $7.8 billion, making it the fourth largest digital currency in the cryptoeconomy. That market cap is almost a clean one billion dollars ahead of bitcoin cash ($6.96 billion), the space’s fifth-placed contender at the moment.
The leg up comes after the litecoin price doubled in Q1 2019. It was the cryptocurrency’s best-performing quarter to date. LTC has now quadrupled in value since the start of January, when the coin was still priced at $30.
Accordingly, litecoin’s recent performances have been fingered by some analysts as bullish indicators for the wider cryptocurrency space. More analysts yet have argued that Litecoin’s forthcoming “halvening” is a major underlying reason for the buy pressure.
Why Is Litecoin’s Halvening in Focus?
In early August, the Litecoin blockchain will undergo a so-called halvening, when its mining rewards will be reduced from 25 LTC to 12.5 LTC.
The halvening occurs every four years, a remnant of the Bitcoin codebase that Litecoin was originally forked from. The LTC price acutely rallied ahead of its previous halvening — which cut rewards from 50 LTC to 25 LTC — back in 2015.
So what does the halvening have to do with price? Scarcity, or in the very least perceived scarcity, simply put.
One of the main investment appeals of cryptocurrencies like bitcoin and litecoin is that they are deflationary assets, i.e. their issuances have hard caps. No more than 21,000,000 BTC will ever be created, and no more than 84,000,000 LTC will be mined into existence accordingly.
Some agree with that thesis, others disagree. Regardless, many cryptoeconomy stakeholders’ eyes will be on Litecoin as its halvening, which comes on August 8th, 2019, will precede Bitcoin’s own May 2020 issuance drawdown by several months.
It’s a fitting position for Litecoin, which is hailed in recent times as a “complementary” network to Bitcoin — it’s similar but different enough to Bitcoin to be regarded as a safe testing grounds for the larger and more popular blockchain.
Of course, Litecoin’s halvening is not such a test per se, though many will be watching it as a potential indication for how Bitcoin’s own halvening will go next year. If the LTC price continues to rally ahead of August, then that dynamic will undoubtedly boost the perception that the bitcoin price will perform similarly.
Whatever happens, miners will be the most directly affected, as they will soon receive less litecoin for their efforts than ever before. However, Litecoin creator Charlie Lee has suggested mining will still be profitable for most LTC miners after the halvening.
Litecoin block halving is in 56 days! https://t.co/EBWbsIUp47
Here are some stats on mining profitability. After halving, miners are still profitable with electricity under 10¢. Many are paying only 5¢ and therefore should keep mining LTC post-halving. (https://t.co/AcQPEjdNtb) pic.twitter.com/VtA9aAv7FS
— Charlie Lee [LTC⚡] (@SatoshiLite) June 10, 2019