Litecoin Completes Third Halving: What’s Next?
Litecoin has reached a significant milestone by successfully completing its third halving event. This event resulted in a reduction of block rewards from 12.5 LTC to 6.25 LTC, occurring at a block height of 2,520,000.
The blockchain, now 12 years old, experiences halving approximately once every four years or after mining 840,000 blocks.
Looking forward, the fourth halving event for Litecoin is scheduled in about four years, specifically on or around July 30, 2027, at a block height of 3,360,000.
Halving is a crucial mechanism in cryptocurrency networks where the rewards granted to miners for verifying transactions and adding blocks to the ledger are halved by 50%.
Both the Litecoin and Bitcoin blockchains incorporate this feature, implementing halving approximately every four years. Although traders might anticipate a surge in LTC value following the reduction, historical data indicates otherwise, challenging such expectations.
The two prior halvings for Litecoin took place on August 5, 2019, and August 25, 2015. According to Charlie Lee, the founder of Litecoin, these disinflationary halvings play a crucial role in achieving widespread adoption while maintaining network security.
However, despite this optimistic outlook, has Litecoin’s reaction to prior halvings been bullish? Let’s take a look.
Refer to the 1W Log Scale Litecoin Chart Below:
As shown in the chart above, following the halving event in August 2015, Litecoin remained in a trading range of $2.8 to $3.6 for a period of 19 months. However, a significant breakout occurred alongside a Bitcoin rally, propelling Litecoin prices to reach as high as $370 by December 2017. A somewhat similar pattern was observed after the August 2019 halving.
Traders appeared to anticipate the halvings in advance, evident from pre-event rallies, and subsequently took profits before adopting a wait-and-see approach during the months leading up to a potential Bitcoin bull run.
The seemingly indifferent response of LTC to such a pivotal event could be attributed to the fact that, on both occasions, Bitcoin, being the dominant cryptocurrency by market value and industry standard, was still recovering from severe bear market conditions.
Furthermore, it is essential to note that crypto bull markets typically begin several months after Bitcoin’s reward halving, occurring approximately 8-9 months after Litecoin’s halvings. As a result, Bitcoin’s fourth halving is expected to take place in March/April 2024.
This is all based on the notion that these cycles will continue as so, which is an entirely different conversation given the macroeconomic conditions right now are far different from any prior Bitcoin or Litecoin halving.
If we witness a significant rally in the DXY or a substantial pullback in the wider stock markets, which Bitcoin has primarily followed since the beginning of 2022, will the Bitcoin cycle still repeat as in prior cycles?
Hard to say; only time will tell.
