Good Morning all. In approximately 2 months, we will experience an LTC halving where block rewards miners receive will be “halved” from 25 LTC to 12.5 LTC. The last halving event for this token was back on August 25th of 2015. In the world of digital assets, that feels like lightyears ago. As much as we would like to draw on that past event to look for probable outcomes in price action in the upcoming months, we don’t know how reliable those comparisons would be.
In the past, BitOoda morning reports have looked at event driven catalysts, such as forks, (i.e. Constantinople), as potential uncertainty. We advised in these events to use options to help protect positions, or take speculative bets on price as volatility in these times tend to increase. Although the halving certain, we don’t know how price will react. In our opinion, we believe we shall see a shift of compute power move away from this network and onto more profitable mining ventures. We know that the supply schedule gets cut in half, but we do not know if token demand will increase, decrease or stay constant.
This event can also be compared to a “buy the rumor, sells the news” type scenario, where weeks leading up to the event LTC price rallies, but after the date of the halving the momentum slows and traders looking for that explosion to the upside that doesn’t occur decide to close their built-up length and price retraces.
We will be keeping a closer eye on the price of LTC as the clock tics to zero. We are exploring potential speculative options plays in this coin as well, as the BTC implied vols have softened over the last week or so following the vol spike in early May. If you want to bounce some ideas off of us please reach and we can explore some trade idea.