- Litecoin’s third mining-reward halving will reduce the per-block reward to 6.25 LTC from 12.5 LTC.
- Contrary to expectations, past halvings have not led to immediate price increases, indicating the same could hold true for the upcoming event.
The Litecoin network, a Bitcoin fork birthed in 2011, prepares for its third mining-reward halving. This will shrink the per-block reward for miners verifying transactions and contributing blocks to the ledger by half. Scheduled for later today, the event will bring down the reward from 12.5 to 6.25 LTC.
Examining the “Halving” Phenomenon in Litecoin and Bitcoin Networks
Halving is an integral part of both Litecoin and Bitcoin blockchains. The event, taking place roughly every four years, is a significant market event that reduces by 50% the per-block reward miners receive in these cryptocurrency networks. Despite the presumable supply constraint, historical data negates the immediate bullish surge of LTC prices post-halving.
Litecoin’s upcoming halving, estimated to occur around 15:11 GMT, mirrors previous events on August 5, 2019, and August 25, 2015. Litecoin’s founder, Charlie Lee, underscores that such halvings foster mass adoption while maintaining network security.
However, Litecoin’s performance following the previous two halvings has not been particularly bullish. Post the 2015 halving, Litecoin’s price oscillated between $2.8 and $3.6 for 19 months, until a breakout concurred with Bitcoin’s rally, leading to a price hike to $370 by December 2017. A similar trend followed the 2019 halving.
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This lukewarm response might stem from traders pricing in the halvings ahead of the event, leading to profit-taking and a subsequent period of uncertainty awaiting a Bitcoin bull run.
The absence of immediate bullish sentiment around the halving could be explained by Bitcoin’s market behavior. Bitcoin, the cryptocurrency market leader, was recovering from a harsh bear market during both previous Litecoin halvings. Moreover, cryptocurrency bull markets usually commence months after Bitcoin’s halving, which occur 8-9 months post Litecoin’s halvings. Bitcoin’s fourth halving is slated for March/April 2024.
As of the moment, Litecoin trades at $90.29, marking a 28.8% year-to-date increase. The first half of the year witnessed a rally that closely resembles the price gains preceding previous halvings.
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