Litecoin Blockchain Successfully Completes Halving But LTC Price Tanks 5%
On Tuesday, August 2, the Litecoin blockchain successfully completed the halving which reduces the block reward to half - from 12.5 earlier to now at 6.25 LTC.
At block 2,520,000, the Litecoin blockchain went through an automated halving procedure. Similar to Bitcoin, Litecoin's mining rewards are cut in half approximately every four years, leading to a reduced supply of digital coins being created.
The main goal is to decrease inflation on the network, as fewer coins result in higher value per coin. Theoretically, this should increase the price of Litecoin, assuming all other aspects of the network remain unchanged.
Litecoin, a derivative of Bitcoin, experiences halvings every four years to decrease the new coin supply in circulation. In Litecoin's latest halving, mining rewards for network-supporting computers, called miners, have reduced from 12.5 Litecoins to 6.25. Bitcoin's halving is anticipated to happen next spring.
However, following the successful halving event of yesterday, the Litecoin (LTC) price corrected further by 5% instead of riding on a bullish sentiment. After each of its previous two halvings, Litecoin's price experienced a decline for several months, and on Wednesday, it fell by 5.7%. However, between January and early July, the token's price surged by approximately 60% to over $112 before retreating to its current value of $87.62. Despite this, many other digital currencies rallied during the same period.
At the beginning of the year, investors were going long on LTC when the narrative surrounding it was prominent. However, as time passed, the LTC narrative lost momentum as the market's attention shifted towards the numerous spot BTC ETF applications.
Following the sluggishness in the LTC price after the halving event, investors have turned sceptical whether we would be seeing similar outcome after Bitcoin halving. However, this scenario seems unlikely as both Litecoin and Bitcoin have behaved differently during the halving events. Bitcoin, the largest cryptocurrency, often experiences significant price impacts during its halvenings. Historically, its price tends to rally before and after the event. For instance, after the halvening in May 2020, Bitcoin's price increased by approximately seven times over the following year before experiencing a sharp decline
Additionally, Bitcoin received a boost from recent news of BlackRock Inc., the world's largest asset manager, filing for a Bitcoin exchange-traded fund (ETF) in June.