Litecoin halving is due today, on August 2, 2023. This event occurs every 840,000 blocks according to Litecoin's predetermined schedule. There have already been two such events: the first in 2015 and the second in 2019. The upcoming event will reduce the Litecoin production reward from 6.25 LTC to 3.125 LTC.
Halving, a key event in Litecoin's protocol, reduces mining rewards by half. This could increase the coin price due to reduced supply.
What Is Litecoin?
Litecoin (LTC) is one of the most popular and oldest cryptocurrencies, ranking twelfth in market capitalization. In the near future, Litecoin can survive significant changes associated with halving - an event that halves the number of minted coins created every 2.5 minutes.
Halving Litecoin less than a week later, there are 3,574 blocks left. After halving, the Litecoin block fee will decrease from 12.5 LTC to 6.25 LTC. This means that the Litecoin emission rate will drop from 7,200 LTC per day to 3600 LTC per day. Thus, halving reduces inflation and increases the cryptocurrency deficit.
Litecoin halving occurs every 840,000 blocks, every four years. This is Litecoin's built-in supply control mechanism, which ensures that the total number of coins does not exceed 84 million. The first Litecoin halving took place in 2015, when the block award dropped from 50 LTC to 25 LTC. The second Litecoin halving occurred in 2019, when the block award became 12.5 LTC.
Litecoin halving can have a significant impact on cryptocurrency prices, as it affects demand and supply in the market. On the one hand, halving reduces selling pressure from miners who receive fewer new coins. On the other hand, halving can stimulate demand for Litecoin from investors and users who expect price growth.
Historically, Litecoin halving has been accompanied by significant price increases for months or years after the event. After the first halving in 2015, Litecoin's price increased by 14,207%, and after the second halving in 2019, it increased by 1,575%.
How Will the LTC Price Change in 2023?
Over the past year, Litecoin (LTC) has shown significant volatility. The price of cryptocurrency reached a peak in 2017 and again in 2020 at about $250, but it hasn’t been trading at this level by 2022. As of July 27, 2023, Litecoin was $90.68.
Based on historical data and current predictions, it can be expected that Litecoin's price may increase after the halving event.
However, due to the high volatility of cryptocurrencies and the influence of various external factors on the market, it is challenging to provide accurate forecasts. It is imperative to approach cryptocurrency investments with caution and conduct thorough analysis before making decisions.
It's worth noting that MimbleWimble did not help: the most recent significant Litecoin event was the MimbleWimble update introduction in mid-May 2022. This update enhances network privacy and scalability. This update generated significant interest and was expected to result in a substantial coin price increase. However, due to the implementation of MimbleWimble, Litecoin, along with other coins utilizing privacy algorithms, was delisted from several exchanges. Consequently, there was no notable price increase.
Forecasts related to this event deviate from the typical pattern of price increases and include the possibility of a coordinated sale. In particular, the renowned network analyst Ali Charts presented an innovative perspective on halving, proposing his theory that the highly anticipated event could potentially be a preparation for the sale of the asset by major players.
These concerns are related to the observed increase in new Litecoin addresses created on the network. Recently, over 690,000 active LTC addresses have emerged. This surge is significant because historically, a price correction tends to occur whenever the number of active Litecoin addresses crosses the 350,000 mark.
This model suggests that the current accumulation of addresses could potentially lead to a price decrease after the halving. This is possibly the result of a coordinated sale.
On the other hand, the upcoming Litecoin halving is also expected to lead to a significant increase in prices. This belief stems from the deflationary effect caused by halving, which reduces the rate at which existing Litecoins are created. Combined with the increasing demand for the coin, this could create an ideal scenario for price growth in the medium to long term.
The potential impact of halving has created a dichotomy: either a probable sale or a significant accumulation. As users and investors assess the potential effects of halving, they will adjust their strategies accordingly. This could impact the outcome in various ways.
In addition, the consequences of Litecoin halving should provide valuable information to the cryptocurrency community. This is particularly important as investors prepare for the upcoming Bitcoin halving scheduled for April next year.
Meanwhile, Litecoin reflected the cryptocurrency market's price movement last week. Over the past 24 hours, the asset has traded in the $92-$95 range, showing gradual growth. Litecoin is currently trading at $92 at the time of writing.
However, it cannot be argued that halving is the only factor determining Litecoin price. The price of Litecoin also depends on a variety of other variables, such as adoption, regulation, competition, innovation, political and economic events, etc. In addition, halving can be anticipated by the market. Therefore, it is impossible to accurately predict how Litecoin's price will behave during and after halving.
Currently, Litecoin costs approximately $91 per coin. Since the beginning of the year, Litecoin has grown by 30%, while Bitcoin has increased by 78%. This may indicate that Litecoin lags behind the main cryptocurrency and has the potential for further growth. However, this may also mean that Litecoin has become less appealing to investors and users who favor other cryptocurrencies.