Litecoin ($LTC) futures derivative contracts have seen an open interest exceeding $420 million, marking an impressive 22% growth since the beginning of the year. Growing appetite for Litecoin may be influenced by several factors.
According to data from Coin Glass, first reported by The Block, open interest in Litecoin futures has grown to the highest level seen since the beginning of last year. Open interest refers to the number of outstanding derivatives contracts
A multitude of factors might have fueled this burgeoning open interest in Litecoin futures, including the recent surge of tokens being minted on the network after Bitcoin’s network started suffering from a flurry of activity over BRC-20 tokens being minted. A notable driving force is the impending halving event scheduled for August 5, where Litecoin’s new coin issuance rate will be slashed by 50%.
The Litecoin block reward for miners will be slashed by 50% from 12.5 LTC to 6.25 LTC after the halving. Historical LTC price data suggests that the price of Litecoin could surge months after its halving event to the point it hits a new all-time high next year. The cryptocurrency could, however, endure a correction right after the halving.
According to data analyzed by popular cryptocurrency analyst Rekt Capital, Litecoin “trends to rally quite strongly before its halving,” with the cryptocurrency rising 820% after bottoming out 122 days ahead of its first-ever halving, and rising 550% after bottoming 243 ahead of its second halving.
Historically, the cryptocurrency rallied more after its halving event. After its first halving, LTC surged 12,400%, while after its second halving it rose 1,573%.
Over the past month, Litecoin, a cryptocurrency that’s often referred to as the silver to Bitcoin’s gold, has been on a steady ascent, exhibiting nearly 7% growth and nudging its value from $86 to $92.
As CryptoGlobe reported its creator Charlie Lee has revealed h believes LTC has potential to see significant gains against the flagship cryptocurrency ahead of its highly-anticipated August halving event.
The cryptocurrency has already surged 85% since reaching a record low against Bitcoin in June 2022, and Lee believes that LTC/BTC could rally to 0.025 BTC, translating to an increase of over 700% during the next bull cycle.
It’s important to point out that the effect of halving events on the price of a cryptocurrency is not certain, and opinions on the matter vary among analysts. The past performance of a cryptocurrency does not guarantee future performance.
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