The Litecoin Network, created in 2011 as a fork of Bitcoin, is set to implement its third mining-reward halving later Wednesday, reducing the pace of expansion in the supply of its native token, LTC. Halving is a process by which the per-block reward given to miners in a crypto network for verifying transactions and adding blocks to the ledger is reduced by 50%. According to Litecoin founder Charlie Lee, these disinflationary halvings help achieve mass adoption without sacrificing network security.
Wednesday’s change will reduce the per-block LTC reward to 6.25 LTC from 12.5 LTC and will probably happen around 15:11 GMT (11:11 am ET), according to the website litecoinblockhalf.com. Previous halvings occurred on Aug. 5, 2019, and Aug. 25, 2015.
However, litecoin’s response to the previous two occurrences was anything but bullish. Following the August 2015 halving, litecoin traded between $2.8-$3.6 for 19 months, before a breakout that coincided with the bitcoin rally and saw prices rise as high as $370 by December 2017. A somewhat similar pattern played out following the August 2019 halving.
Perhaps traders priced in the halvings in advance, as evident from the pre-event rallies, and then took profits before sitting on the fence for months awaiting a bitcoin bull run. More importantly, crypto bull markets typically begin months after bitcoin’s reward halvings, which occur 8-9 months after Litecoin’s halvings. Bitcoin’s fourth halving is due in March/April 2024.
At press time, LTC changed hands at $90.29, a 28.8% year-to-date gain. The cryptocurrency rallied during the first half in a move reminiscent of the previous pre-halving price gains.