Litecoin Halving 2023 Completed: Here’s Everything You Need to Know!

Key Takeaways:

• The highly anticipated Litecoin Halving 2023 has finally gone live!
• Litecoin’s block reward structure has now been reduced by half from 12.5 LTC down to 6.25 LTC.
• Thus, The current daily production of LTC coins through mining is 6.25 LTC.
• LTC price saw a near 8% crash immediately after the successful Litecoin Halving event on August 2, 2023, around 15:45 UTC.

The Litecoin halving event occurred at approximately 15:45 UTC and proceeded smoothly without any technical glitches. This pre-scheduled reduction in block rewards is a fundamental part of Litecoin’s monetary policy, designed to control its supply and ultimately bring the total supply of LTC to 84 million coins. As Litecoin founder, Charlie Lee, had previously explained, the halving ensures a more gradual issuance of new coins and incentivizes miners to play a pivotal role in network security.

LITECOIN HAS SUCCESSFULLY HALVED ITS BLOCK REWARD!

⚡ $LTC ⚡ pic.twitter.com/iemCnkPsdu

— Litecoin (@litecoin) August 2, 2023

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Introduction

Halving in crypto refers to an event where miners’ block reward for validating transactions on the blockchain gets reduced in half. Essentially, this is a procedure following which a miner starts to receive 50% fewer coins for every block they mine. This mechanism was put into place to control the crypto asset’s inflation rate and create scarcity, which can increase its value over time. As the block reward decreases, it becomes harder and more expensive to mine new coins, leading to a reduced supply of new coins being introduced into the market. This is a very crucial process in various crypto assets like Bitcoin, Litecoin, Bitcoin Cash, and Bitcoin SV.

Let’s take an example to explain this better. In the case of Bitcoin, the initial block reward was 50 BTC. However, the block reward was reduced to 25 BTC after the first halving event. Then, after the second halving event, the block reward was reduced to 12.5 BTC. This process is expected to continue until the maximum supply of Bitcoin, which is 21 million, is reached.

Halving is an event that is looked at very carefully by all participants in the crypto market since it usually has an impact on the crypto asset’s price and market cap over time.

So, What is Litecoin halving?

Very similar to the explanation and example mentioned above, Litecoin is a crypto project that also undergoes halving for the same reasons, only the numbers vary a little. In the case of Litecoin, this event occurs after every 840,000 blocks have been mined, which takes around four years.

Some other things are somewhat similar; for instance, when Litecoin was launched, the block reward for miners was 50 LTC. After the first halving event, the reward was reduced to 25 LTC and then to 12.5 LTC during the last halving. Previously, the block reward was at 12.5 LTC; but now, after the halving, which took place on August 2, 2023, it has come down to 6.25 LTC.

Litecoin Halving Date History

Its genesis block was mined back on October 7, 2011 when the reward was 50 LTC. About four years later, at a block height of 840,000, Litecoin underwent its first halving, and the reward was cut down to 25 LTC. The second halving happened at the block height of 1,680,000 when the reward was further halved to 12.5 LTC. Now with the current halving of Litecoin, which happened around 15:45 UTC, at a block height of 2,520,000 – the block reward has been halved to 6.25 LTC.

How did Litecoin Halving 2023 impact LTC Price?

LTC/USD | Source: TradingView

• Litecoin price saw an immediate crash of almost 8% within a matter of 12 hours since the halving event, going from around $94 to $86.1 – indicating that the development was quickly sold into. 
• In one fell swoop, Litecoin price has broken down below the 50-day and the 200-day exponential moving averages.
• Additionally, Litecoin’s Relative Strength Index value has also breached the 40 mark and is currently around 39, which can bring in further bearishness in the short term. 
• This is in line with the Litecoin price action back during the previous halving events back in 2019 and 2015. 

Litecoin Price Prediction 2023

Since the Litecoin halving event has already been completed, the price of Litecoin has exhibited significant fluctuations throughout the year, indicating considerable long-term volatility. The recent surge in price, fueled by the excitement surrounding the ‘Litecoin Halving,’ drove it to reach yearly highs at $115. However, as the week comes to a close, the price is expected to experience a bearish trend, potentially leading to a bearish monthly close.

With the decline in trading volume following the initial rally, the bulls have become more cautious in their approach. Despite the proximity of the halving event, the price is showing less variability, suggesting that its impact may be minimal. Consequently, the likelihood of a bearish monthly close has increased, which could be concerning for a sustained upward movement. However, in the following weeks, the bulls might regain significant strength, allowing the price to overcome bearish pressures and potentially close the month around $89 to $92.

Read more: Litecoin Price Prediction

What LTC Investors Should Know?

Following the recent Litecoin halving event, where the block reward was reduced from 12.5 LTC to 6.25 LTC, investors should be aware of the potential impact on the coin’s price. The halving, a significant event in the crypto world, aims to create scarcity and slow down the rate of new LTC issuance. However, the immediate aftermath of the halving saw the price of Litecoin drop by 8%, indicating increased volatility in the market.

Investors need to keep in mind that price fluctuations are common after halvings, as traders react to the event’s outcome and market sentiment. It is essential to exercise caution and conduct thorough research before making investment decisions in the wake of such events. Additionally, monitoring market trends and understanding Litecoin’s fundamentals can help investors navigate the post-halving landscape and make informed choices to optimize their investment strategies.

How Has LTC Price Performed in the Past Halving Events?

Predicting how this Litecoin halving event is going to affect the price of Litecoin would become a speculative activity, however on the other hand – we can take a look at how LTC prices have reacted in the past during the previous two halving events and see how prices have reacted. This would give us a fair idea of how the reaction might be this time around.

Let’s take a look at the immediate action in LTC price post the previous two halving events.

Litecoin’s First Halving Event | Source: TradingView

And here’s the second one.

Litecoin’s Second Halving Event | Source: TradingView

Overall, the charts show that the prices have tended to be unresponsive to the event, especially during the first time. During the second time, we also saw a significant fall that began before the halving event and continued even after it. Thus, it is very difficult to say what will happen next.

Read more: Litecoin Price Prediction

What is the importance & purpose of Litecoin Halving?

The importance and purpose of Litecoin halving is due to its major effect on the price, thus the market capitalization of Litecoin. The purpose behind the halving event in these kinds of blockchain networks is to control the inflation rate of Litecoin and try to create scarcity in the token supply, making it more valuable over time. The reduced rewards for mining incentivize miners to continue contributing to the network while limiting the number of new Litecoins introduced into circulation.

Thus, with this halving completed, Litecoin miners will now receive about 6.25 LTC instead of the 12.5 LTC that they are receiving now for the same amount of work. So the reduction in the rate of supply, in effect, creates a scarcity in the system, even if every other variable remains the same, resulting in an increase in demand from investors, thus, an increase in the price of the crypto asset.

Difference between Litecoin & Bitcoin Halving

While the idea and the concept behind the halving in Bitcoin and Litecoin are the same, there are a few minor differences that are there due to the difference in the nature of the blockchains.

1. Litecoin’s Halving Doesn’t Have the Same Market Impact as Bitcoin’s
   This is pretty simple to understand. Litecoin has a market capitalization of $6.6 billion, while the king coin, Bitcoin, has a market capitalization of nearly $560 billion, nearly 85 times larger. Thus, the effect on the market due to Bitcoin’s halving would be drastically more due to its sheer dominance over the total crypto market cap.
2. Litecoin and Bitcoin Work With Different Levels of Scarcity
   Litecoin has a fixed supply of a total of 84,000,000 coins that will ever be in circulation; Bitcoin is limited to a quarter of that at 21,000,000. Thus, there is an incrementally larger scarcity of BTCs than there are LTCs. A little under 11.5 million LTCs are left to be mined as of the time of writing this article, which is more than six times greater than Bitcoin’s remaining supply. Also, the other fact to consider is that Litecoin is trailing Bitcoin by about three years and, thus, is lagging behind that in that aspect too.

Read more: Bitcoin Halving 2024

Conclusion

In conclusion, Litecoin’s halving event was something that a lot of investors were watching out for primarily because LTC is known as the silver to Bitcoin’s gold and also the fact that Bitcoin’s halving event is expected to come about sometime in May 2024. Now as the days go by, it is yet to be seen how LTC price ends up performing in the future with its history of long-term dips in Litecoin price after the halving event.

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