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At 6:16 pm Beijing time on August 5, Litecoin's mining reward at block height 840,000 will be halved, from 25 Litecoins to 12.5. Affected by the halving, as of the halving, Litecoin's 24-hour increase was 12.4%, temporarily reported at $102, and the coin price exceeded $100 for the fifth time this year. This is the second halving in the life of Litecoin, which was born in 2011. The first halving was on August 28, 2015. As early as half a year ago, Litecoin's production cut was seen as a turning point for the price to rise. In December last year, Litecoin began to rebound from the bottom, and on June 22 this year, it rose to $145, 7 times the price at the end of last year. Compared with historical prices, investors are more concerned about future market trends. Jiang Zilong, CEO of venture capital laboratory Tlab and senior cryptocurrency analyst, believes that although the positive effects of Litecoin halving have been exhausted, there is not much room for further correction. “The next Bitcoin halving will drive Litecoin to continue to rise.”
The secondary market is expected to continue to rise, and the interests of Litecoin miners may be damaged in the short term. Captain Yu, the head of the Mining Association, told Fengchao Finance that after the halving, the overall income of miners will be reduced by half, and the overall profit will become 10%~30% of the current level. "If the price of the currency does not rise, the income from Litecoin mining will become very pessimistic." LTC rose 12.4% in 24 hours during the production cutThe long-awaited "Litecoin halving" has finally arrived. On August 1, Litecoin founder Charlie Lee tweeted a notice that Litecoin production would be reduced in four days. At 6:16 pm on August 5, Litecoin began to halve at block height 840,000, and the LTC mining reward was reduced from 25 to 12.5. This is the second halving since the birth of Litecoin, the last time was on August 28, 2015. Affected by the halving, as of the halving, Litecoin's 24-hour increase was 12.4%, temporarily reported at $102. Eight years ago, Google engineer Charlie Lee was influenced by Bitcoin and created Litecoin. In principle, the generation mechanism of Litecoin is the same as Bitcoin, and it was called a Bitcoin altcoin at the time. Compared with Bitcoin, Litecoin has a shorter block time, averaging 2.5 minutes, and a higher total amount of 84 million. On August 1, Charlie Lee tweeted a message predicting the Litecoin halving Due to its short block time, Litecoin was expected to be used for payment when it was first created. Later, it ranked among the top in the cryptocurrency market value rankings. In the following 7 years, it has been classified as a "mainstream currency" together with Bitcoin and Ethereum. The Litecoin production cut is also highly anticipated. In theory, if Litecoin production is halved, the market scarcity will be prominent, and the price of the coin will rise. Investors even regard the Litecoin production cut as a small turning point for the entire market. At the beginning of this year, when Bitcoin was still at the bottom of $3,000, a public chain founder expressed despair, "It is difficult for the market to change for the better in the first half of this year. Let's see whether the Litecoin halving in the second half of the year can bring some funds back to other currencies." As a result, Bitcoin has been rising wildly since April, breaking through $14,000 on June 26, leading the mainstream currencies. Litecoin has also launched a wave of growth under the market's expectation of production cuts. On December 15 last year, Litecoin began to rebound from the bottom. On June 22, the price of Litecoin rose to a peak of $145, a seven-fold increase in half a year compared to the low price of $20.6 at the end of last year.Many analysts continue to be bullishAs of 8:00 p.m. on August 5, AI Coin showed that the price of Litecoin was $100.8. Compared with the time of halving, the price has slightly fallen back. In a group that is concerned about Litecoin production cuts, some investors are pessimistic: "When all the good news comes out, it will turn into bad news. The second half of the year will be tough." Compared with a few pessimistic investors, cryptocurrency analysts believe that there is still "room for growth." TLAB CEO Jiang Zilong said that the room for Litecoin price correction is very limited: “The expected reduction in Bitcoin production may also bring about market movement ahead of schedule, driving Litecoin to continue to rise. By the end of the year, LTC may exceed the previous high of $145.” He believes that the core logic behind the price fluctuations brought about by the production cut lies in two points. First, market expectations. The market will assume that the currency price will rise before the production cut, and will experience a short-term pullback after the production cut, and then rise following the Bitcoin production cut. Second, it is the game between "mining coins" and "hoarding coins", that is, whether funds enter the market to choose mining or to buy in the secondary market. After the production cut, the miners' rewards will decrease, and some funds will flow to the secondary market. Analyst Justin Zhao believes that the value of Litecoin is currently underestimated. He analyzed that the current K-line is a weekly adjustment and is expected to fluctuate between 80-100 to form a bottom: “If BTC adjusts sufficiently and then hits its previous high of $20,000 by the end of the year, then LTC could reach around $230 by the end of the year.” Litecoin weekly K-line has begun to rebound After the last halving, Litecoin rose from $9 at the time of halving to a high of $369, a 41-fold increase. There will be continued increases after the halving. Wang Xinxi, co-founder of the Litecoin Foundation, said in a social sharing that the previous halving market was just an expected market, which officially ended on the day of the halving. The real positive news will continue to be released from the day of the halving, forming a bull market: “The halving is really a positive thing. The daily output is halved, but the funds to take over the market remain unchanged. The price will reverse and form a positive feedback. Investors buy when prices rise and do not buy when prices fall, and the price will rise many times.” However, judging from the historical price patterns of Bitcoin and Litecoin during their last halving, the price of the currency will fall back after the block reward is reduced. Litecoin also experienced a 70% drop from $9 to $2.7 after halving, in just 45 days. For investors, the risk of short-term pullback still exists.Miners’ interests are damaged in the short term Compared with the optimistic expectations of the secondary market, the reduction in Litecoin production will cause "internal injuries" to miners in the short term. "After the halving, the overall income of miners will be reduced by half, and the overall profit will become 10%~30% of the current level. "If the price of the currency does not rise, the income from Litecoin mining will become very pessimistic." said Captain Yu, the person in charge of the Mining Association. At present, the main Litecoin mining machines are Ant L3+ and L3++. The power consumption of L3+ is 800 watts, which consumes about 19.2 kWh of electricity per day, and the income is only about 0.008 LTC, equivalent to about 5.7 yuan. If the electricity fee is calculated at an average of 0.26 yuan, the electricity fee will account for more than 87% of the income. After the output is halved, the Litecoin rewards mined will basically cover the electricity cost. Zhu Yu, COO of CoinIn Mining Pool, even believes that L3+ will face the situation of "selling by kilogram" due to the decline in energy efficiency. BTC.Com shows that the daily mining income of Antminer L3++ is about 11.9 yuan As the source of currency output, what will the miners encounter next? Wang Xiaoyi, founder of Beijing Mining and Ocean University, told Honeycomb Finance that the impact of Litecoin production cuts on miners is almost unsolvable. He explained that Litecoin was originally intended for payment, and later BCH, USDT and other competing currencies in the payment field emerged, and the application scenarios are decreasing. In addition, Litecoin consensus is not as strong as Bitcoin, and Litecoin will face great market resistance in the future: “For miners, if they want to mine, they will choose the Bitcoin with the strongest consensus.” Justin Zhao revealed that the Antminer L3++ is now in shutdown state, and the latest L5 has not yet been publicly launched on the market: “The overall LTC price is already close to the cost of electricity.” Regarding the adverse effects that halving may have on miners, Li Qiwei also said in a recent interview that it is possible that some miners will turn off their machines, but the mining difficulty will be readjusted after a few days and everything will return to normal. Captain Yu also reminded investors who are interested in mining that if the price of the currency remains unchanged after the halving, some machines will be eliminated. "The computing power will undergo new changes. For investors, buying the currency directly is a more secure strategy."Do you think Litecoin is still worth buying? |
