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SFOX, a recognized dealer of cryptocurrencies for traders and institutions, released a new volatility report in which they inform that the upcoming Litecoin (LTC) halving could eventually increase volatility in the price of the fourth largest digital asset. Litecoin is going to be halving as soon as on August 5.
Could Litecoin Halving Affect Its Price?
SFOX, a company that deals with cryptocurrencies and institutional investors, released a new report about volatility in the cryptocurrency market. They addressed many different issues, including Facebook’s Libra, LedgerX and ErisX approval by the U.S. Commodity Futures Trading Commission (CFTC), Bitcoin SV (BSV) upgrade at the end of July and Litecoin’s halving.
Proof of Work (PoW) digital currencies such as Litecoin or Bitcoin (BTC) require miners to process transactions with computing power. These activities tend to be very profitable if the individuals and companies performing them have efficient installations, low temperatures and cheap electricity.
Litecoin miners, as well as miners in other networks, get rewarded with coins every single time they find a block with transactions. This is why it is very important to think about the upcoming Litecoin halving. Every four years, Litecoin and Bitcoin rewards for miners get reduced 50%, which means that miners will be earning 12.5 LTC per block rather than 25 LTC as they were doing until now.
With the new issuance of Litecoin reduced and a larger interest from investors and users, the price of the digital currency could be affected by volatility.
On the matter, SFOX commented:
“While the market may have already priced in this upcoming decrease in the rate of new LTC added to the total supply of LTC, it’s theoretically possible that LTC could see further volatility as the event grows even closer.”
In previous Bitcoin and Litecoin halvings, the price of these virtual currencies expanded over the previous months of the halving event. A few months after this, the price of these digital assets also reacted positively.
The cryptocurrency market seems to be in a bull run after an entire 2018 that was very negative for digital assets. With a lower issuance of LTC and a larger interest for this virtual currency that was founded by Charlie Lee, its price is expected to grow.
At the time of writing this article, Litecoin is the fourth largest crypto with a market capitalization of $6.56 billion and a price per LTC of $104.8 according to data provided by CoinMarketCap. In the last 24 hours, it has been the second-best performing cryptocurrency among the top 10 after Binance Coin (BNB).
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