Litecoin’s price surge ahead of halving gives hope to Bitcoin investors
Bitcoin investors are finding hope in the performance of Litecoin, a smaller cryptocurrency that has outperformed the broader crypto market over the past year.
As of this writing, Litecoin’s price has fallen by three percent in the past 24 hours and is now down by 15 percent compared to last week. Despite this, Litecoin is still up 23 percent in the last 30 days and 72 percent in the past 12 months.
The main driving factor behind these movements is its halving event on August 20, which will slash miner rewards by half. It occurs earlier than Bitcoin’s due to its faster block generation rate, which has increased bullishness for the altcoin. Like Bitcoin, Litecoin undergoes halving cycles to keep inflation at a minimum.
Litecoin has dramatically benefited from the Securities and Exchange Commission’s (SEC) lack of attention. The SEC recently named many altcoins as securities, causing them to struggle in the market. Cardano (ADA), for instance, is still down by 25 percent compared to the start of June when the regulator sued Binance and Coinbase.
Recent on-chain data show that whales continued accumulating Litecoin even as the price dropped to $70 in early June. It is currently the tenth-largest market capitalization cryptocurrency, valued at $7.7 billion. It has consistently performed well, even outperforming Bitcoin.
Bitcoin’s recent performance
Bitcoin’s price also surged to a new high after several prominent financial institutions applied to launch spot ETFs in the U.S. ahead of its halving in 2024. As of writing, BTC prices are above $30,000 after reaching $31,504 last Thursday — its highest level since June 8, 2022.
Bitcoin is now back to the levels it was trading at before the collapse of Three Arrows Capital, a crypto hedge fund that triggered a wave of defaults in the crypto industry.
BlackRock has refiled paperwork with the SEC to add new details to its proposal for a spot Bitcoin ETF. The company is one of several large firms that have sought permission to launch such a product in recent months.
A spot Bitcoin ETF has been seen as a major goal for the crypto industry, as it would allow investors to buy and sell Bitcoin directly on an exchange. However, the SEC has repeatedly rejected prior filings for a spot Bitcoin ETF, citing concerns about market manipulation. Bitcoin reached a record of almost $69,000 in late 2021.
Bitcoin bulls are now optimistic about the future of the cryptocurrency. Meanwhile, bears remain cautious due to rising interest rates and regulatory risks.
In the past, Bitcoin has had a history of unpredictability and extreme volatility. Despite its past three halvings having been followed by record prices, the current outlook for crypto is uncertain. This is due to the possibility of more central bank interest rate hikes to curb inflation.
“Traditional markets seem to be entering a more risk-off mood – we can’t yet assume that Bitcoin will just shrug that off,” said the Crypto is Macro Now newsletter author, Noelle Acheson.
