Is Litecoin dead?

Although Litecoin’s halving event is approaching, the market does not seem to be paying much attention to it, which has raised concerns about its future. In this article, researcher Alex will explore the psychology of the halving event, whether Litecoin still needs to exist, and the market’s reaction to it. The following is the original text:

I researched Litecoin and its upcoming halving event, which is about 70 days away, so this article is about: the psychology of the halving event, and whether Litecoin still needs to exist.

First, let’s look at the historical background:

Litecoin was created in 2011 based on Bitcoin, with faster block times and a different mining algorithm. Like Bitcoin, Litecoin halves its block reward every 4 years to reduce inflation and increase scarcity.

Why is the halving event bullish?

First, because the miner rewards are halved, this reduces the structural supply of selling. Less selling = higher prices, it’s simple.

After three Bitcoin halving events, the price has shown a parabolic upward trend, and most people associate halving events with bullishness. The best narrative should be able to attract people of all IQs.

Is the halving event necessarily bullish?

uncertain.

Since the halving event reduces the amount of rewards, it reduces the diversity of the types of participants who can profit and protect the network. Therefore, all else being equal, each halving event weakens the security of the network while increasing scarcity.

When people bid for the halving event, it is effectively a vote of confidence that the security of the network is worth protecting.

Now let’s look at Litecoin’s halving event.

With less than 70 days until the halving event, we have yet to see strong interest in it. Past Litecoin halving events saw price peaks approximately 50 days before the halving event.

We can’t extrapolate from two data points from completely different coins. But crypto stupidity never stops, and the apathy towards the Litecoin halving event may be a sign that the network’s security isn’t worth saving. Since 2019, more innovative cryptocurrencies have emerged on the market, leaving poor Litecoin behind.

But to be honest, I don’t think Litecoin is ready to go away. Most people I talk to are in favor of the halving event, they just don’t have a strong Schelling point for bulls to enter yet.

Meanwhile, Litecoin’s on-chain activity has been quietly growing since the launch of LTC-20, a fork of Bitcoin’s BRC-20 token standard, on May 3. The past week has seen more transactions than ever before.

Litecoin, which also hit an all-time high for active addresses last week, has its own variety of LTC-20 tokens for speculators to gamble with.

There is a disconnect between the attention being garnered on-chain and the apathy seen in price action.

Now might not be the right time to take risk on altcoins as they have been slaughtered over the past few weeks.

But it also means there is less competition with other narratives.

Now might not be the right time, but I think if the market decides to save Litecoin, then the time is close.

If it doesn’t happen in the next 100 days, I think it will be a good sign that other halving narrative tokens are gradually losing influence.