Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
Litecoin [LTC] remained floating above the $68 price all week. Similar to other altcoins, it also saw an increase in price during the bull run. At the time of writing, it was trading at $68.65.
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Glass half full
On August 2, Litecoin’s third halving took place when the network reached a block height of 2,520,000, dropping miner rewards from 12.5 LTC to 6.25 LTC.
Litecoin has successfully halved its block reward!
⚡ $LTC ⚡ pic.twitter.com/iemCnkPsdu
— Litecoin (@litecoin) August 2, 2023
Halving is a major event programmed into certain cryptocurrency protocols, including Litecoin, that occurs at regular intervals. During this event, the block reward given to miners for validating transactions and securing the network will be reduced by half.
The primary purpose of halving is to control the issuance rate of new coins and control inflation within the cryptocurrency system.
The impact of halving is twofold. First, it introduces an element of scarcity into the cryptocurrency ecosystem. With the reduced block rewards, the rate at which new coins are put into circulation decreases.
This creates a sense of scarcity among market participants, potentially leading to an increase in demand for cryptocurrency.
Secondly, halving affects mining rewards for miners. As block rewards are halved, miners receive fewer coins for their mining efforts. This can result in reduced mining profitability, especially for miners with higher operating costs.
Some miners may leave the network if the costs of mining exceed the revenues, potentially leading to a temporary drop in the hash rate and overall security of the network.
Litecoin, as it completes its third halving since its inception in 2011, will experience a reduction in its supply. It will result in less new LTC being mined. This scarcity factor could lead to increased demand and speculative activity in the cryptocurrency market.
Additionally, miners will have to adapt to reduced mining rewards, which could impact their profitability and mining operations.
ChatGPT makes a comparison
Experts expected that the halving could help Litecoin gain more market share in the PoW sector. To make a comparison, I consulted ChatGPT to highlight the various differences between multiple PoW cryptocurrencies and their various benefits.
According to the AI bot, Litecoin’s emphasis on faster transactions and lower fees is likely to attract more users and investors. As transaction volumes increase, network activity for Litecoin could increase, broadening its appeal as a fast and cost-effective digital currency.
However, Dogecoin’s inflationary nature contrasts with Litecoin’s scarcity as a result of the halving. While Dogecoin has strong community and viral appeal, concerns about dilution due to inflationary supply could put Litecoin at an advantage in the short term.
Meanwhile, users who value privacy and anonymity will be more likely to stick with Monero [XMR] due to its unique privacy features. However, for those who prioritize speed and lower costs, Litecoin could serve as a practical alternative.
As for Ethereum Classic [ETC]the focus on immutability and code-as-law principles could attract a different audience compared to Litecoin’s user base. The short-term upside for each cryptocurrency would depend on specific usage scenarios and the preferences of users and investors during this period.
Source: ChatGPT
Does Litecoin have a competitive advantage?
Regulatory scrutiny of various cryptocurrencies has negatively impacted several altcoins. However, Litecoin was one of the few altcoins that was considered a commodity in the lawsuit against Binance [BNB].
On March 27, 2023, the US Commodity Futures Trading Commission stated this $LTC is a ‘true’.
— Litecoin (@litecoin) July 21, 2023
After seeking ChatGPT’s opinion on this development, it stated that Litecoin’s classification as a commodity is “an important milestone in its journey.” It could lead to an increase in investor confidence and possibly increase its price.
Source: ChatGPT
Read Litecoins [LTC] Price forecast 2023-2024
Price tells a different story
At the time of writing, LTC was trading at $68.65. Both LTC’s Relative Strength Index (RSI) and Money Flow Index (MFI) remained below the neutral line of 50.
Source: LTC/USD, TradingView
In conclusion, Litecoin’s on-chain metrics indicate a bearish price trend in the short term.
I asked ChatGPT wThen it expected LTC to reach the $100 price point. It gave a vague answer, saying this could happen in the next six months.
Source: ChatGPT
