The creator of cryptocurrency Litecoin and one of the candidates for the title of creator of Bitcoin Charlie Lee shared his thoughts on the upcoming halving of the miner’s reward (halving), warning investors about the importance of taking the associated risks into account.
“Cryptocurrencies really carry significant risks. I have witnessed numerous bear markets or 90% drops. When Litecoin traded around $ 200, I said that it could collapse to $ 20. When the price drops, a lot of uncertain investors come out, and those who bought about $ 200 and higher and sold for $ 20 lost 90% of their portfolio. If you can’t survive a 90% drop, don’t buy, ”Li told the Crypto Love YouTube channel.
Halving Litecoin, according to calculated data, is to be held on August 5th.
“This is always a kind of shock for the system. After halving the reward, the profitability of some miners will decrease, and they will be forced to turn off the equipment. If a large percentage of miners do this, the release of blocks will slow down for a while. In the Litecoin network, a change in complexity occurs every three and a half days, but after halving, there is a likelihood that units will be slowed down by seven days, after which everything should return to normal, ”said Charlie Lee.
At the same time, and most importantly, he believes that the reduction in the issue of Litecoin should now be reflected in the price of cryptocurrency.
“Everyone knew about the upcoming halving from the very beginning. But people expect price increases. Therefore, many people buy because they expect the price to go up. This is a self-fulfilling prophecy – the price really goes up because they are buying, ”added Lee.
On June 22, Litecoin reached a price peak against the USD this year, rising above $ 140, although as early as December 2018 it was trading at about $ 20. As of Wednesday morning, July 10, the weighted average rate of “digital silver” was about $ 118.50.
Recall that in June, Charlie Lee published a calculation of how much profit the miners could expect after Litecoin Halving. In particular, he came to the conclusion that even after reducing the reward for the found block, they would still make a profit.