Image may be NSFW.
Clik here to view.
The current markets in the cryptocurrency sector are facing some major fluctuations. With earlier last week Bitcoin and its altcoins like Litecoin witnessing a crash, the current global economic situation is one of the concerns. However, the good news is that the crypto-world has been spared the horrors of the worst impact of the pandemic.
Cryptocurrency seems to be one of the most promising assets that investors might look forward to delving into. Many economic controls and measures for the cryptocurrencies last year have helped in their survival today. One of such processes witnessed was Litecoin’s halving. Litecoin is expected to fetch high profitability and be a major booster in the currency market.
The measure of “halving” compliments the very purpose of Litecoin. Litecoin is like a sensible alternative to fiat currencies like the gold which is a deflationary yield. “Halving” basically is a reduction in miner rewards upon every block creation in the reward chain. The halving takes place after four years and after every 210,000 and 840,000 blocks.
Litecoin has a capped supply so that there is enough room for demand generation as the prices rise. Investors wish to accumulate as much as of the coins. The last “halving” was carried out on 5th August 2019 and the next one is estimated for 2023. So, when inflation hits, Litecoin will pick up in demand. There are a few main reasons behind initiating halving-
- Reduction in the rate at which new coins come into the market. Inflation rates are thus cut this way.
- The network difficulty eases out. This is the measure to understand the level of hardship it is to build a block. The network gets better with the changing hash rate.
- Since it is deficient and deflationary if the supply didn’t have a cut the demand would eventually wash off. This is what is observed with the fiat currencies whose supply is printed at will irrespective of the demand.
While the “halving” raises market volatility, it is no surprise. Cryptocurrency, in general, is a risky dealing. The best outcome from this, however, is the increased market value of the coins. Investors have been observed to collect more of the Litecoin at current times when with every crash every week there is also a sudden rise that is recorded. Barring a couple of inconveniences, Litecoin still shines like a diamond during inflationary circumstances.
