Yahoo Finance Why is this crypto token rising amid crash and FTX collapse?
One digital asset is bucking crypto's downward trend, surging 43% to a six-month high as the majority of the cryptocurrency market nose-dives following the collapse of the FTX exchange.
Litecoin (LTC-USD) has rallied 43% from $55 to $78.14 in the month of November due to an upcoming change in its mining rewards and the issuance of new coins.
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The so-called "Litecoin Halving" will reduce the rate at which new Litecoins are created and thus lower the available amount of new supply, which usually encourages price appreciation.
Litecoin traded flat in the past 24 hours.
Confidence in the crypto industry has taken a hit since the fall of FTX.
In contrast to Litecoin's surge, crypto market leaders are bleeding.
Bitcoin (BTC-USD) was down 0.7% in the past week to $16,568, while ether (ETH-USD) fell 1.6% in to $1,195.
When Litecoin was launched in 2011, miners received 50 litecoins for successfully mining a block.
This reward, also known as a “subsidy”, is halved every 840,000 blocks, which is roughly every four years.
The third halving takes place in 2023 and will see the current 12.5 LTC subsidy reduced to 6.25 LTC.
Read more: FTX bankruptcy sees 80,000 UK crypto investors lose funds
Litecoin saw an equally bullish move against the majority of the market in the months before the previous halvings in August 2015 and August 2019.
The digital asset has climbed to its highest point since May this year.
However, it has not crossed above the trendline characterising the bear market that began in April 2021.
Litecoin is still a long way off its all-time high of $381 seen on 10 May 2021, on the eve of the cataclysmic crash of Terra's UST/Luna stablecoin.
What is Litecoin?
Of the thousands of cryptocurrencies in existence, many do not have unique use-cases or tokenomics to merit any stand-out qualities. Litecoin has been around for over a decade and is branded as the silver to bitcoin's gold.
As a digital asset it is similar to bitcoin in that it is validated via an energy intensive proof of stake consensus algorithm. Litecoin has a finite supply of 84 million coins, whereas the maximum supply of bitcoin will always be 21 million.
The value of each litecoin is a lot less than each bitcoin and it can be mined using "regular" computers.
Dogecoin (DOGE-USD) is "merge mined" when a processor mines litecoin. Litecoin miners acquire a haul of dogecoins each time they mine a block of the Litecoin blockchain.
The cryptocurrency was created by software developer Charlie Lee in 2011. Lee was Coinbase (COIN) Engineering Director until 2017.
Litecoin had a fair launch in 2011, and it has been reported that Lee did not give himself a pre-launch share, unlike many other crypto-projects.
Although he did mine Litecoin in the early days, Lee now said that he has sold all of his LTC.
Litecoin is not controlled by any centralised body and has decentralised mining distribution of about eight main mining pools.
There is a Litecoin Foundation based in Singapore which has a stated aim of "advancing litecoin for the good of humanity".
#Bitcoin #Litcoin
In bear market, #LTC like to frontrun #BTC.
Is Litcoin showing the way to Bitcoin like in previous cycles? pic.twitter.com/QOt6t8IV0V— Titan of Crypto (@Washigorira) November 22, 2022
Solana crashes as Litecoin pumps
The panic in the wake of the FTX collapse has not been good for Solana (SOL-USD).
The price of Solana plummeted this month, and there here are no bullish reversal signs in place.
Solana received substantial support from Sam Bankman-Fried's Alameda Research in the early days of its conception.
The Swiss-based blockchain and cryptocurrency also has millions of dollars in value still locked on the FTX exchange.
The native token of the Solana network, sol, has traded flat this week, with a price of $14.46 at the time of writing.
Last week crypto exchange Binance announced that it was temporarily suspending deposits of USDT (USDT-USD) and USDC (USDC-USD) on the Solana network, which did not encourage investor confidence.
The deposits eventually resumed on Binance, which has reduced the fallout from Solana's FTX exposure.
