A lot of eyes are on Bitcoin and Litecoin, two among the top 10 cryptocurrencies today by market capitalization. The duo has something in common and that is the closeness of their halvings within a matter of months. Similarly, there is high-level speculation that the halvings will lead to their yearly high and even a new all-time high.
Bitcoin’s Halving Scheduled for May 2020
Bitcoin will be halved in May 2020 and there are expectations that it will do a lot of good to its price. People are no longer looking forward to a price level of $10,000 or the $20,000 of 2017, but something as high as $100,000.
There’s John McAfee, for instance, who has said it time and again that there is no way Bitcoin will trade below $1 million by 2020’s end. PlanB, a professional cryptocurrency trader also predicted on March 22, 2019, that Bitcoin will sit comfortably at $55,000 after May 2020’s halving.
Litecoin, on the other hand, will be halved in August this year and like Bitcoin, an increment in price has been speculated. With fewer coins being supplied to the market and leading to a severe shortage, it is hoped that it will push its price which currently valued over $100 to a yearly high and maybe $1,000.
Bitcoin’s Top Use Case Remains Speculative
Nevertheless, Chainalysis, a New York-based blockchain researcher has noted that “Bitcoin’s top use case remains speculative”. According to the platform, Bitcoin economic activity on cryptocurrency exchanges is 89.7%. The percentage is also a slight decrement from 91.1% recorded in 2018. Merchant activity or usage, on the other hand, is only 1.5 percent.
Based on this data, Chainalysis has come to the conclusion that Bitcoin has not found a major use case in the real world because people are less willing to spend the virtual asset. They are more interested in trading it on exchanges in hopes that its price will rise to amount to profit. It, therefore, outlined that Bitcoin’s major use case is for speculation.
Speculation Drives Bitcoin’s Price
In the same vein, this speculation has driven the price of the virtual asset. An instance is a case where the market prices may have suffered a downtrend of recent, but the crypto community is still bullish. There are also platforms like Bakkt and Fidelity Investment whose products upon their launch, could potentially attract institutional investors.
Litecoin also comes with a promise at its halving because scarcity has always been able to drive up the prices in the past. Priced over a $100 already as at press time, the run-up may have already begun and may take it one step further by August 2019.