Three-months ahead of the Litecoin halving, the LTC creator Charlie Lee has spoken out about the digital commodity, arguing that LTC is positioned for robust growth.
Litecoin has recorded an 85% increase against Bitcoin since August 2022, and with programmatic supply constraints hitting in August, the coin is poised for more upside, according to Charlie Lee.
Charlie Lee anticipates growth
Charlie Lee argues that LTC/BTC can rally to 0.025 BTC – over 700%, in the next bull cycle. This is in part due to significant milestones achieved throughout 2022, such as “higher throughput by design, scalability with extension blocks, better fungibility and privacy from MWEB.”
I can see an upside target of 10% (0.025 LTC/BTC). In the next bull market, 5% (0.0125) shouldn’t be too hard to achieve. I honestly don’t see it going much below 1% (0.0025) on the downside. The next halving will be in ~92 days. This is going to be fun.
Lee’s statements came a week after he delivered a keynote about cryptography at the Massachusetts Institute of Technology (MIT). In the keynote, Lee also discussed economics, monetary policy, the pitfalls of fractional reserve banking and the value of having a fixed money supply. The computer scientist also talked about MWEB – a Litecoin soft fork that introduces privacy, fungibility and scalability features to the network.
Litecoin halving in 90 days
LTC’s rebound has been accompanied by increased chatter about the upcoming block reward halving. Specifically, the block reward for miners will decrease by 50%, from 12.5 LTC to 6.25 LTC in August 2023 – 90 days time. Consequently, the new LTC supply will reduce by half, which will add supply constraints on the market, theoretically increasing its value.
Price-fundamentals mismatch
Nowadays there’s a lot of talk about ‘maturities mismatch’ every time an institution fails. Notorious fraudster Sam Bankman Fried told Skybridge’s Anthony Scaramucci with a straight face, as his empire imploded that this was the reason for FTX’s troubles. Similar claims were made when tradfi bank, Silicon Valley Bank collapsed in March. Rarely, if ever, is there the slightest recognition that financial markets may be looking at a jaw-dropping price-to-fundamentals mismatch when it comes to Litecoin, which boasts 100% uptime, integrity and growth for 11 years and counting.
According to various market watchers (myself included), Litecoin falls directly into this category. Engineer by profession-turned full-time Litecoin advocate, Shan Belew, has compiled a ‘Network Value Model’ (NVM), which incorporates various on-chain Litecoin data points that suggest Litecoin is undervalued. These data include wallet address growth, usage statistics, USD transaction values, among other metrics, which indicate a staggering price-to-fundamentals mismatch for the digital commodity.
Investors dream when price is measurably undervalued. pic.twitter.com/XkLjHREh9L
— Shan Belew Ⓜ️🕸 (@MASTERBTCLTC) May 3, 2023
All-time high network security
Litecoin’s Network security has also seen a robust secular growth trend. Since breaking all time highs in September 2022, Litecoin’s hashing power, which indicates network security from potential attacks, soared to a whopping 900TH/s in April 2023.
The backdrop of an ongoing US banking crisis is a tailwind for digitally scarce bearer assets which have no counterparty risk.
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