As Litecoin approaches its third halving event due Wednesday, August 2nd, Litecoin whales have been busy buying up the available supply.
Litecoin Whales accumulate
According to on-chain data by Santiment, a noteworthy trend has emerged among mid-sized Litecoin whales, referring to addresses holding 100 to 10,000 LTC. These entities have picked up substantial holdings since June 14, totalling 205,400 LTC. Santiment attributes this surge in purchases as part of the highly anticipated halving event, which sets long-term supply constraints on the already limited amount of Litecoin available for purchase.
⚡️ With #Litecoin‘s highly anticipated #halving event within arm’s reach on Wednesday, key traders holding between $9.5k and $950k worth of $LTC are aggressively accumulating. Like most coin halving events, this is being perceived as a #bullish event by traders. https://t.co/wkpoOrceCS pic.twitter.com/1UrxCdcoGS
— Santiment (@santimentfeed) July 30, 2023
At the time of writing, cumulative holdings stand at 18.18 million LTC, approximately $1.7 billion. This hyper aggressive accumulation highlights significant prevailing undercurrents for the cryptocurrency, which might not have been immediately apparent to broader markets. Specifically, it details positive sentiment regarding Litecoin’s future prospects as a high-value blue-chip crypto. While halving effects on price-dynamics tend to be long-term (as with Bitcoin), investors and traders are still monitoring developments as the clock ticks away.
The halving, prior cycles
The term ‘halving’ refers to a pivotal event that denotes paradigm shifts for both Bitcoin and Litecoin. These are referred to as epochs. Bitcoin’s third halving event took place on May 11th, 2020, after which the cryptocurrency increased 700% to $69,0000 in 7 months. Litecoin is set to enter its third epoch this week. While price increases are not guaranteed, prior epochs saw similar upswings, in particular the 2015 halving event after which Litecoin rose thousands of percent (8,000%) leading up to the 2017 blow off top.
The halving directly impacts the issuance rate for created coins, resulting in a reduced supply of coins going into circulation. In turn, this scarcity, coupled with increasing demand, exerts upward pressure on dollar (fiat) prices.
LTC Momentum & value proposition
The supply constraints form part of a game-theoretical model for sound money, wherein money is governed by a protocol instead of committees or central banks. Unlike thousands of vapourware projects available today, at no point is Litecoin’s fundamental value proposition at odds with the internal logic behind probabilistic price increases.
And following the centralised scams and implosions of 2022, Litecoin continues to gain momentum as a decentralised, high integrity bearer asset with robust adoption. In fact, as one of the earliest coins created by former Google engineer Charlie Lee in 2011 as a horizontal scaling solution for the grass-roots bitcoin movement, history may be about to repeat for the crypto.
Over the years, Litecoin has gained a reputation as the ‘silver to bitcoin’s gold’ due to its backwards compatibility with BTC, limited supply and broader attributes. As noted in this medium post, many believe that Litecoin’s current pricing falls utterly short of its fundamental value proposition, which is expected to be rectified in the months following its third halving event.
Aggressive accumulation by major stakeholders is certainly a reflection of confidence in the Litecoin network.
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