Watch Litecoin’s halvening
What happens with LTC is often a signal for what happens with BTC later.
Litecoin has gained a reputation as Bitcoin’s sandbox. As silver to bitcoin’s digital gold, Litecoin isn’t technically incredibly sophisticated, but it is more agile and faster moving. While it can take months or years to agree and implement changes on Bitcoin, Litecoin can do the same far more quickly. Litecoin offered SegWit long before Bitcoin. And Litecoin’s price movements often signal what bitcoin will do too. LTC bottomed and bounced before BTC, for example.
The Halvening
Next month, Litecoin’s block rewards will be cut from 25 to 12.5 LTC. This Litecoin Halveningwill take place nine months before Bitcoin’s own Halvening event.
Halvenings are keenly anticipated in the crypto world, because the supply reduction means more net demand on the market — and therefore higher prices in the long run. In the short term, the markets can get very choppy as traders try to anticipate what the market will do.
Last Bitcoin halving event, in 2016, took place in the middle of a massive bull run. The Halvening itself had little immediate effect on price, but surely contributed to the surge to $20k as there was less BTC for miners to sell. This time, the crypto community expect the same: an epic bull run, driven not only by greater awareness from institutions and the public, but by the simple economic impact of reduced supply.
Caveat emptor
But Buyer Beware: in the medium-term, that reduction of supply may have less impact on price this time. Bitcoin could be trading above $10k precisely because speculators anticipate the effect of the halving in nine months.
For Litecoin — which has seen 500% growth from the bottom in December — Charlie ‘Satoshi Lite’ Lee says it’s already priced in. He has warned that many Litecoin miners may shut down — and that there could be a savage crash when the bubble pops, as there was last time.
We have to ask whether Litecoin will offer a signpost for Bitcoin’s future, as it so often has before. So: watch Litecoin’s Halvening. Observe what the market does and factor that into your bitcoin trading strategy.
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