Litecoin (LTC), one of the oldest and most popular cryptocurrencies, is preparing for its halving event in August this year.
Halving is a process that halves the reward for mining new blocks, which in theory should increase the coin's rarity and value. Litecoin's market activity has been showing some unusual patterns over the past few weeks, according to a recent analysis by Santiment.
The Reason for Litecoin's Rising Number of Active Addresses LTC20 Protocol
Santiment is a platform that provides data and information about the cryptocurrency market. In their latest report, they announced that the number of active addresses of Litecoin, that is, unique addresses that send and receive transactions on the network, has risen to record levels.
This shows that more and more people are using Litecoin for various purposes, but not necessarily for large transactions.
The reason behind this phenomenon may be related to LTC20, which is an experimental standard for creating non-fungible tokens (NFTs) on Litecoin.
LTC20 is known as an attempt to bring NFTs to Litecoin, which has a faster and cheaper network than Ethereum. However, LTC20 is still in its early stages and has not been officially confirmed by the Litecoin Foundation. Some Twitter users in the Litecoin community are experimenting with the LTC20 and creating their own NFT on Litecoin.
Santiment's analysis suggests that LTC20 could be the main factor behind the increase in active addresses in Litecoin. Santiment found that the smallest group of wallets holding 0 to 0.001 LTC is growing rapidly relative to the total supply. This indicates that many of these wallets are used to create and transfer NFTs on Litecoin that require very small amounts of LTC.
Santiment's report concludes with a cautious view of Litecoin's future performance. They state that they cannot predict the direction of the market, but advise users to monitor the trends and potential impact of LTC20 on Litecoin's network activity.
*Not investment advice.