Litecoin Halving to Show Strong Position Ahead of Bullish Trend!

• The reward for mining Litecoin is reduced by half after every 840,000 blocks, which occurs every four years.
• Since its launch in 2011, the blockchain has experienced two halving events.

On August 2, 2023, at block 2,520,000, Litecoin is set to experience its third halving. However, fluctuations in the network’s hash rate might necessitate a revised target date. The purpose of this halving is to mitigate inflation and encourage a more stable growth of the cryptocurrency by decreasing the overall number of coins in circulation.

Every 840,000 blocks, occurring every four years, the mining reward for Litecoin is halved. Since its launch in 2011, the blockchain has undergone two halving events, with miners currently receiving 12.5 LTC as a reward.

Miners Reward Halved

The term “halving” pertains to a process that reduces the reward for confirming crypto-mining transactions on a blockchain by half. This is implemented to enhance the value of a digital asset in line with the principles of supply and demand by decreasing the rate at which new units of the asset are created.

With the forthcoming halving event, the Litecoin block mining reward will be reduced to 6.25 LTC. The initial mining reward for Litecoin was 50 LTC, but it was halved to 25 LTC on August 25, 2015, at the block height of 840,000. The subsequent halving occurred at block height 1,680,000 on August 5, 2019, again halving the reward.

Each day, the Litecoin network produces approximately 7,200 LTC by mining 576 blocks. Currently, the daily output of LTC stands at 9,000; however, following the third reduction, this figure will decrease to 3,600. This will slow the production rate of LTC, potentially leading to increased demand from traders and investors, which may elevate the overall value of the assets.

Increasing Active Addresses

In recent weeks, activity on the Litecoin network has surged significantly. Along with a rise in LTC transactions, the number of smaller wallets has also grown.

Litecoin [LTC] experienced a rush of active addresses following the announcement of the LTC20 token standard. According to Santiment, the count of 24-hour active addresses rose from a concerning 200,000 on May 2 to 900,000 by the end of the eighth day.

The online community surrounding LTC engaged in lively discussions. Santiment reports that both the number of active addresses and small wallets capable of holding up to 0.001 LTC have been on the rise. The number of “active” addresses for a cryptocurrency reflects its level of user interaction. This is determined by the quantity of transmitting and receiving wallets.

Halving Impact on Price

The price of Litecoin has been a topic of intense speculation following the halving event. Some analysts predict that the value of the asset will increase post-halving, while others contend that the event will have minimal impact as it has already been factored into market valuations.

A favorable outlook for Litecoin’s halving event can be linked to the market trends of Bitcoin after its own halving, which also occurs every four years. Similar to Litecoin, Bitcoin’s halving helps to decrease inflation and cuts miners’ block rewards by half.

Given Bitcoin’s significance in the market, its halvings have frequently led to considerable market volatility. Numerous cryptocurrency assets experienced notable price surges in the years following Bitcoin’s halvings in 2016 and 2020.

However, on-chain data indicates that previous Litecoin halving events have not yielded similar outcomes. The halving events of 2015 and 2019 had no substantial effect on LTC prices. Consequently, the trajectory of Litecoin’s price movement in the aftermath of the halving remains uncertain.