Litecoin’s third halving will take place in approximately 100 days, on August 2, 2023 at block 2,520,000, though the date may be subject to change due to fluctuations in the network’s hash rate.
Halving is a method of reducing the rewards received by crypto miners for validating transactions on a blockchain. This decrease in rewards is implemented to slow down the creation of new units of a digital asset, thereby increasing scarcity and potentially driving up the asset’s value through the principles of supply and demand.
By reducing the number of coins in circulation, halving aims to counteract inflation and promote sustainable and stable growth for the cryptocurrency.
The Impact of Halving on the Litecoin Network
Bitcoin’s halving occurs every four years after 840,000 blocks, with miners receiving 50% fewer coins than before. The blockchain has undergone two halving events since its launch in 2011, with miners currently receiving 12.5 LTC as rewards.
Litecoin’s block mining rewards will be halved to 6.25 LTC with the upcoming event. Initially, miners received 50 LTC, but after the first halving in August 2015 at block height 840,000, the reward was reduced to 25 LTC. On August 5, 2019, the second halving occurred at block height 1,680,000, and the reward was halved once again.
Currently, the Litecoin network mines approximately 576 blocks per day, generating 7,200 LTC. However, after the third halving, daily LTC production will drop to 3,600, lowering the supply rate and potentially elevating demand from investors, positively affecting the asset’s overall value.
The Impact of Litecoin’s Third Halving on LTC
There is considerable speculation regarding the effect of the halving on Litecoin’s price. Some believe that the value of the asset will rise following the event, while others think that the halving has already been priced in and will have no impact.
The optimistic outlook for Litecoin’s halving event is based on the historical price trends of Bitcoin following its own halving, which also occurs every four years. Like Litecoin, Bitcoin’s halving reduces the inflation rate and cuts miners’ block rewards by 50%.
Bitcoin’s dominance gives its halvings a history of causing significant disruptions in the market. Following Bitcoin’s halving in 2016 and 2020, the market saw rallies that led many crypto assets reaching new all-time highs in the years that followed.
However, on-chain data indicates that Litecoin’s previous halving events failed to produce the same effects. The value of LTC remained mostly unaffected by the network’s halvings in 2015 and 2019. Before the most recent halving, Litecoin’s value decreased and continued to decline after the event. Therefore, it is unclear which direction Litecoin’s price will take following the halving.