Will the Litecoin continue to rise after the production cuts are reached?

There is a saying in the currency circle: Bit Gold, Wright Silver.

The cryptocurrency market has experienced a decade of ups and downs. In addition to Bitcoin, many altcoins have already been washed out of the market, and Litecoin is still in the top ten market capitalization. With the good news that Litecoin is about to cut production, its price has risen gradually since the end of last year.

According to the CoinAll exchange news, the trading rate of the Litecoin against Bitcoin has risen nearly three times, which is the best way to outperform the market. It shows that the market is still very optimistic about Litecoin.

Source: www.coinall.com

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Many coin players know the saying of "Bitcoin Gold, Wright Silver", which not only reflects the stable price of Litecoin, but also the value stored in silver. It also reveals the inherent properties of Bitcoin and Litecoin. Litecoin is derived from Bitcoin, but the Scrypt algorithm is used to significantly reduce the time of the block, which increases the speed of transaction transfer.

There is a huge benefit to doing this, that is, the Litecoin can be quickly commercialized. Now, Liteco has done a good job in terms of payment, covering nearly one million stores around the world, including many areas. It can even be said that as an innovative product of Bitcoin, Litecoin is actually better in terms of application.

Therefore, Bitcoin is called gold, which is mainly used as a value storage tool from the perspective of anti-inflation and risk aversion. While Litecoin is silver, the hedging property may not be as good as gold, but as a commodity transaction, it seems better.

01 Production cuts are coming, pushing prices up

We know that Bitcoin's block rewards will be halved every four years. As a Bitcoin derivative, Litecoin also refers to this practice when the code is set. According to the statistics of the Litecoin halving statistics website, the next time the production is reduced is about August 6, the mining award will be halved from the current 25 LTC to 12.5 LTC, and the inflation rate of Litecoin will be halved.

It can be seen from the simple economic model that if the miner's mining cost is the same, but the reward is reduced by half, to ensure that the miner continues to mine, then the token price needs to be at least doubled, which is for the price of Litecoin. Growth is undoubtedly a huge boost.

However, from an investment point of view, the positive will have a relative advancement. I believe this is why the Litecoin has such a rise before the halving.

02 data rebounded, increased attention

In addition to halving the profit, the data index on the Wright currency chain is also picking up. The current number of transactions on the Litecoin chain is on the rise, which also indicates that the number of users on the Litecoin chain is increasing, and the fundamentals are still getting better.

Source: coinmetrics

The increase in the number of transactions only reflects the fact that more people are involved, but from a quantitative perspective, the volume of transactions on the chain is more telling. If the total value of the transaction volume on the blockchain increases, it can also indicate that the value of the entire network may be greater.

From the chain transaction data, it can be seen that the trading volume of the Litecoin chain is gradually increasing, which indicates that the value of the overall network of Litecoin is gradually increasing.

Source: coinmetrics

The number of active addresses is another important data indicator that shows how many users on the blockchain network are actually using them.

It can be seen that the number of active addresses of the Litecoin network is increasing, and it is growing rapidly in April-May this year. This also indicates that the users of the Wright network are more active and support their value.

Source: coinmetrics

More intuitively, we can see from the graph of network value that the value of Litecoin network shows a significant growth trend, so in the long-term, Litecoin still has potential.

Source: coinmetrics

03 Summary and outlook

 

From the perspective of chain data and halving effect, Litecoin, as one of the initial altcoins, has a strong network effect and has its own user base. It also has a very good application in commercial landing. The consensus, capital, and computing power of the Litecoin accumulation are difficult to overtake in the short term. Therefore, for Litecoin, whether or not the halving effect is over, I believe that with the further development of its technology and application, the future has greater potential.

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