Why Satoshi Nakamoto, the creator of Bitcoin, built this mechanism into his brainchild we do not know, but it likely has to do with the programmer’s supposed distaste towards centralized financial institutions, many of which have the ability to print money at will and without the public’s explicit knowledge.
Just as Bitcoin has so-called “halvenings”, Litecoin (LTC) does too. While the popular altcoin is different than its proverbial godfather, sporting a different block hashing algorithm, quicker block times, and a different focus, Litecoin has block reward reductions built in. Ever four years, the amount of LTC issued per block halves in an event known as a “halving”, “halvening”, or the more formal “reduction in supply issuance/inflation”.
Due to simple supply-demand economics, many are sure that as Litecoin’s halving nears for this August, LTC could surge. We’ve already received a taste of what the cryptocurrency market is feeling, as Litecoin has already rallied by 286% year-to-date (per Messari), ousting most altcoins and even the venerable Bitcoin.
According to a recent tweet from analyst Financial Survivalism, Litecoin still has a lot of room to run. He notes that prior to the cryptocurrency’s previous block reward reduction, which happened in mid-2015, LTC rallied strongly against Bitcoin, eventually finding a parabolic peak right after the auspicious event. Then, Litecoin sold off against Bitcoin, falling into the latter’s halving event.
If historical trends hold up this time around, LTC will continue to rally against BTC — potentially doubling from 0.0148 where it is now to around 0.0270 — in the coming three-odd months. If Bitcoin continues higher from here, this rally in the altcoin could translate into a $250+ Litecoin by the time of the halving.