The highly anticipated Litecoin (LTC) halving will occur later today, Aug. 2, marking the third event in the cryptocurrency’s history.
According to litecoinhalving.com, the Litecoin network will reach a block height 2,520,000 around 3:16 pm UTC, reducing the block reward from 12.5 LTC to 6.25 LTC.
Miners’ subsidy for solving a block is cut in half every 840,000 blocks, which has significant implications for Litecoin’s circulating supply and issuance rate. Halving the block reward decreases the influx of new LTC entering circulation, which has preceded bullish price action in the past, which occurred on Aug. 25, 2015, and Aug. 5, 2019.
Halving price correlation
However, the connection between halvings and price appreciation remains debated. While reduced selling pressure from miners could buoy prices, the market dynamics involving Litecoin and cryptocurrencies are complex.
As Litecoin founder Charlie Lee stated in 2019, the halving should not directly affect the price, though he conceded it does impact sentiment to some degree.
Factors like growing adoption, technological improvements, and shifting regulatory landscapes may significantly determine Litecoin’s post-halving trajectory. Though historically correlated with price rises, halvings do not guarantee positive price action.
However, given recent developments in the U.S. around crypto regulation, Litecoin’s proof-of-work mechanism may make the blockchain a more attractive bet than proof-of-stake tokens, which are currently under debate as unregulated securities.
Litecoin performance
Still, the impending reduction in block rewards has dominated discussion in the Litecoin community. Nicknamed “digital silver” and long one of the top twenty cryptocurrencies by market capitalization, Litecoin continues to see adoption for payments and transfers.
The number of transactions on Litecoin exploded in May 2023 but returned to previous levels in July.
Litecoin price spiked following the decline in transaction count, around the time it was listed for trading on EDX Markets, a non-custodial cryptocurrency exchange backed by Citadel Securities, Fidelity Digital Assets, Virtu Financial, Charles Schwab, Sequoia, Paradigm, and others.
As of press time, Litecoin is up less than 1% on the day and up 2% in the past week.
Though how the halving will impact price remains speculative, it will undoubtedly mark a milestone in Litecoin’s journey.
