Litecoin Down 35% Since Halving, Will Bitcoin Follow the Same Path?
- Bitcoin price drops to $63 and hash rate takes a hit of 39%
- LTC price doesn't have a relationship with stock to flow
- Bitcoin bull market has just started, with 100x opportunity
On August 5th, Litecoin halving went into effect and the reward was cut into half. The price had already enjoyed a good surge, having topped around $145 long before the halving actually happened (in late June).
Since then the price of LTC has dropped 35%. Currently, LTC/USD is trading at $63.44, back to April level, on Bitstamp. However, the price is still up 110.5% YTD.
But it’s not only the price, the network started to grow weaker as well. Liteocin hash rate dropped to 317.9 Th/s from the all-time high (ATH) of 523.8 Th/s recorded on July 14, seeing a loss of more than 39%.
Litecoin Hashrate, Source: https://bitinfocharts.com
Does this mean Bitcoin will Experience the same Fate Next Year?
Interestingly, Bitcoin price is already up more than 159% and the hash rate continues to hit an all-time high, the same way Litecoin did.
However, this doesn't mean, in any way, that Bitcoin halving — that is still 259 days away — will result in a drop in BTC price and hash rate.
This third halving that will cut down miners’ reward from 12.5 to 6.25 BTC is expected to take BTC to a new peak.
Prominent analyst, PlanB who is popular for his Bitcoin price analysis based on the stock to flow model, says the fact that Litecoin price didn’t jump on halving doesn’t mean Bitcoin halving will be irrelevant for bitcoin price as well.
This Logic he Says is “flawed.”
“LTC price doesn't have a significant relationship with stock to flow, so halvings are indeed irrelevant. BTC price-s2f relation is strong,” he said.
However, there is no explanation for why Litecoin doesn't have a relationship with stock to flow model. It could be network effects such as developers, on/off ramps, futures/options, liquidity or any other number of reasons.
According to this model, Bitcoin’s value, however, will go beyond $1 million.
— PlanB (@100trillionUSD) May 12, 2019
After each ATH, Bitcoin price drops until plenty of miners aren’t profitable. As such, miners switch off hardware resulting in a drop in hash rate and difficulty adjusting downwards. This is until miners become profitable again and difficulty starts rising.
And a new bull market starts when difficulty bottoms.
Earlier this month, PlanB shared how after each Bitcoin all-time high, we saw a downward difficulty adjustment. Once it reset to 100%, we get the start of the next bull run with 100x opportunity and we “just started a new run.”
After each #bitcoin all time high (ATH) we saw a downward difficulty adjustment. In the chart the lowest monthly difficulty level (blue) is reset to 100% .. and seems to be an objective start of the next bull run (green/yellow), with 100x opportunity. Just started a new run …🚀 pic.twitter.com/EN8q97NKze
— PlanB (@100trillionUSD) August 4, 2019