Litecoin Rallies as Network Hash Rate Approaches All-Time High; More Gains Expected?
Litecoin’s bullish indicators were flashing green on Monday, as the rapid increase in network hash rate signaled growing adoption of the alternative cryptocurrency and paved the way for continued price dominance in the near term.
The LTC price climbed as much as 9% on Monday, reaching a high near $84.00, according to CoinMarketCap. At the time of writing, the LTC/USD exchange rate was valued at $82.01, having gained 4.3%. Litecoin peaked north of $96.00 earlier this month, having more than tripled in value since the beginning of 2019.
The early-week rally was supported by a sharp rise in trade volumes. Turnover on virtual exchanges was reported at around $2.6 billion, based on latest available data.
At current values, Litecoin has a total market capitalization of just over $5 billion, putting it slightly above EOS for fifth in the crypto market index. It currently trails bitcoin cash by less than half a billion.
In addition to being one of the cryptocurrency market’s top performers this year, Litecoin has demonstrated unique price independence relative to bitcoin, which continues to exert an oversized influence on the broader market. Only a few cryptocurrencies have managed to escape bitcoin’s gravitational pull. These coins (Binance Coin, EOS, Tezos, etc.) have also been among the top performers this year. Read more: Ethereum, EOS, Litecoin, Bitcoin Cash: Major Cryptocurrencies are Escaping Bitcoin’s Sphere of Influence.
Hash Rate Approaches Record High
Litecoin’s rapid ascent through the crypto market rankings has been accompanied by a sharp spike in hash rate, which represents the network’s underlying computing power. On April 8, the network hash rate reached 359.4371 terahash, a new all-time high, according to data from bitinfocharts.com. After dropping in the last week, the hash rate was back above 347 terahash on Sunday.
It’s important to note that rising hash rate doesn’t necessarily reflect stronger market fundamentals. It could just mean that hardware and mining equipment within the network have improved. That being said, hash rate has more than doubled since the start of the year. If rising hash rate is indicative of network adoption and investor confidence, then one could expect further price gains to materialize.
Massive Adoption Drive
The biggest factor behind Litecoin’s ascendancy has been the massive adoption drive by the project’s development community. Last month, digital currency lender Nexo announced that Litecoin has been added as a new collateral option for its instant credit lines. This option gives Litecoin holders the ability to borrow against their assets rather than liquidate them when they need cash.
The Litecoin Foundation has also made headlines by entering into various partnerships in the sports and entertainment industries, including collaborations with UFC, GLORY and Korean K-Pop.
From a purely price perspective, LTC is also expected to get another big push later this year when it completes its second halving event. Tentatively scheduled for August 7, the halving event will reduce Litecoin’s block reward to 12.5 LTC from 25 LTC currently. The protocol had its first halving event back in 2015 when mining reward was cut to 25 LTC from 50 LTC previously.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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