Namecoin (NMC) Halving Triggers Price Volatility

Namecoin (NMC), a relatively older coin aiming to build an economy around domain names, saw a recent revival in price action as the scheduled halving of the block reward happened on October 4.

https://twitter.com/Namecoin/status/1047689046372306944

Namecoin is a project seeking to disrupt the Internet domain name system through an alternative, decentralized DNS. It offers a dot-bit enabled website technology and has a niche but relatively large adoption, thus becoming one of the few crypto projects with a viable product.

Leading up to the halving, NMC rose by 100%, breaking out from around $0.98 to above $2.20. However, after peaking at $2.26 on September 30, NMC now trades at $1.89, with selling triggered by the news depressing the price.

NMC’s issue is trading on niche platforms with a shady reputation. On WEX, the new incarnation of BTC-e, the asset changes hands for as much as $3.13. The exchange is known for its illogical premiums for other assets as well, including Bitcoin (BTC).

On Poloniex and other markets, NMC commands around $0.63, this massive disparity attesting to the riskiness of the asset.

However, the gap does not mean traders can easily arbitrage the price. The WEX exchange has been known to lock down wallets and disallow withdrawals. In the case of Namecoin, the price spike is not organic. Attempting to invest and expecting the price action to continue is ill-advised.

Halvings have acted to lift the prices of assets but have only a temporary effect as selling happens immediately after the event. In theory, block reward halvings are seen as creating scarcity. This is the first block halving for Namecoin, which launched in late 2013.

Current NMC prices in BTC denomination are seriously depressed, hovering near four-year lows. For now, NMC remains a relatively obscure coin that has not made any significant efforts to market itself and secure a place among the hottest assets Thus, the price action is, in fact, a low-volume anomaly.

Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.