Some cryptocurrencies occasionally experience halving events, including Bitcoin, Dash, and Litecoin. It has proved to be critical for the sustainability of cryptocurrencies. The primary focus is on the halving of Litecoin which is due to occur in 2023.
Litecoin (LTC) was launched on October 2011 with a total market supply of 84 Million LTC. The coin has a halving schedule of 840,000 blocks or approximately four years which cuts the rewards miners receive by 50%. Halving is a supply control mechanism that helps reduce the supply of new LTC coins whilst essentially boosting the value of LTC that can be mined. The blocks are mined every 2.5 minutes.
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A quick history lesson
Since its launch, Litecoin has experienced two halving events, with the first happening on 25th August 2015. During this halving event, the block subsidy was reduced from 50 LTC to 25 LTC. The second halving event occurred on 5th August 2019 and saw the block mining reward reduced to 12.5 LTC.
According to Litecoin’s halving website, the next halving event is projected to take place around 3rd August 2023, reducing the block reward from 12.5 LTC to 6.25 LTC. The last halving of this proof-of-work currency is estimated to happen around the year 2142. The year will see Litecoin reach its maximum supply. Currently, the coin has a circulating market supply of slightly over 72 Million and average daily mining rewards estimated at 7,200 LTC.
Analysis of past halving events of Litecoin and its Impact
The historical price tendency of Litecoin before and after halving shows a pattern where LTC experiences a volatility period before striking a bottom, then a price rally period that pumps the price to a local top just before the halving event. A price correction is usually experienced after halving takes place before a post-halving curve where the value of Litecoin increases exponentially.
Several analysts predict a similar price trajectory as seen in the previous two halving events. In the weeks before the first halving event which dates back to August 2011, Litecoin established a local top of around $10 and in the August 2019 halving, LTC price hit near $340 in June. Data shows that Litecoin hit bottom almost six to seven months before the price surges nearing the halving events.
Current price trends of Litecoin
Analysts predict a more or less similar pre-halving bottom structure to 2015 and 2019, where the lows were higher post-halving than pre-halving lows. There has been a steady rally in Litecoin’s price since the beginning of the year. Litecoin has achieved over 130% rebound since bottoming in June 2022 and is speculated to rally on up to more than 200%, which will see the coin’s price surpass the $100 mark.
Market watchers expect the price of LTC to hit highs of up to $180 by July before August’s halving event. With 86.08% of Litecoin already in supply, the coin may undergo a more successful post-halving rally than before.
The future of Litecoin as it approaches halving
Generally, 2023 is expected to be a bullish year for the cryptocurrency sector. Litecoin was modified to be a deflationary currency that has the potential to leverage against inflation. If the 2023 halving event takes a similar pattern as the two previous halving events, Litecoin may experience a breakout phase in the months leading to 2024, thus coinciding with Bitcoin’s halving that is scheduled to take place in the first quarter of 2024. Litecoin has a limited market supply, and halving its emission will create more scarcity of the coin.
The scarcity of LTC, alongside its popularity as the most preferred crypto for payment purposes, may generate a price increase if the coins demand remains constant or increases. Litecoin currently accounts for more than 25% of BitPay’s transactions. LTC has also recently surpassed Shiba Inu (SHIB) in total market capitalization and ranks highly in several price-tracking websites, including Crypto Lists.
There are slightly over 200 days for the next Litecoin halving that will have LTC’s block reward reduced from 12.5 to 6.5. The event is predicted to be on 3rd August 2023 after over 116,000 blocks are mined. The next after this halving event is after another 840,00 blocks are mined which will see its block reward reduce even further. The 2023 LTC halving is highly anticipated by many in the crypto industry and its possible impact on the industry.