Last month Litecoin (LTC) caught the attention of the
crypto world when it completed its planned ‘halving’. Litecoin, which remains
the 5th largest cryptocurrency in terms of market cap, has the halving written
into it’s white paper and it was an event that many investors were expecting.
The halving event
was scheduled by Litecoin to take place on August the 5th, which happened
without any issues. However, what is this halving exactly and how has it
affected the LTC price?
The halving event
has been an important event, especially for the Litecoin miners because it has
changed the reward amount for them.
It all started when the Litecoin blockchain reached the block height amount of
When this block
level was reached it instantly triggered and started the halving process. This
also caused the miners rewards to be immediately be decreased. Previously the
miner’s reward was 25 LTC, now with the change the reward is just 12.5 LTC- not
great if you are a miner.
feature has been put into place by Litecoin so that the amount of rewards for
miners will halve automatically every 840,000 blocks. To imagine this in a time
frame, this occurs roughly every four years. So the next time this halving will
happen is 2023, around August.
Besides the bad
news for miners, the halving also means that fewer LTC have been added to the
market since August the 5th. This situation is likely to result in a drop in
the mining production mainly due to the fact
that the mining difficulty will
adjust, as well as the prospect of smaller rewards for the miners.
miners will simply go to other rival cryptocurrencies that offer better rewards
instead, if this happens in the upcoming months this well lead to a general
decline in the hash rate.
Still it’s not all
bad new for the miners. There are 63 million Litecoins out of the total supply
of 84 million currently in circulation. This means that there is still a fair
amount of 21million blocks available for
mining. This remaining block quantity plus the current Litecoin price may be an
attractive enough offer to stop miners from leaving, even if it means that the
crypto mining market will become even more competitive.
How does all of
this affect the Litecoin price though? Well when there are any scheduled
changes like this in the market, then volatility often occurs. Many LTC holders
and traders were aware of the halving date and expected a lot of price
volatility after the incident. Even if it’s only been a month since the
halving, the price volatility has not been as extreme and some investors were
On the 5th of
August, the scheduled day for the halving, the Litecoin price grew 10% to
$100.38. However, the LTC price then steadily dropped to the ‘before halving’
price of $92 within 24 hours. Of course this was disappointing because a lot of
investors were expecting a lot more post-halving price growth. Instead the
price performance has been pretty lacklustre since then.
However, since the
initial halving price spike, the LTC value has continued to drop, and as we
enter September one Litecoin is worth $68,79. This could be of some concern if
you’re an owner of any Litecoins, particularly because the digital currency was
doing pretty well at the start of 2019.
In fact in January
2019, the Litecoin price increased from $30 to reach an impressive $142 by
June. It then gradually decreased in price before the halving date, but it
still sat comfortably above $75.
It’s a pretty
different scenario when the first ever halving took place back in August 2015.
When that happened the Litecoin price reached its peak value in July, but it
lost nearly half of its value by the time of the halving in August. However,
after the reduction had taken place in 2015, the LTC value increased by
Although 2019 may
not have performed the same way as 2015 price wise, a lot of people still
believe in the future of Litecoin, and that the cryptocurrency can recover
after this underwhelming performance.
There has been a
lot of encouragement for users from a recent statement made by the founder of
Litecoin Charlie Lee. Lee in a recent tweet wrote that ‘ it’s time now for me
to shift focus from adoption back to development’ and that he planned to ‘get
the ball rolling’. This was great news for a lot of LTC owners to hear, the
fact that upcoming development is planned can only be a good thing.
This is a positive
step because it’s likely that the scheduled development will also include
updates on Confidential Transaction updates. It’s important that these features
are worked on and developed because it’ll improve Litecoin’s performance.
Additionally it’s also likely to affect its price in a good way.
We’d recommend watching out for any future developments on the LTC price to see how things will change for it this year. It’ll be interesting to see if it can rise and recover again for the last half of 2019. This could be a good reason why to invest in Litecoin in the future.