Litecoin's rewards will be halved in August. How many times will the price soar?

Litecoin’s blockchain is set to see its mining rewards halved in August of this year, as it is designed to halve every 840,000 blocks mined, or about every four years. What will the next Litecoin halving bring?

Why is the halving important?

The process is designed to control inflation by reducing the rewards for mining Litecoin from 25 Litecoins per block to 12.5 Litecoins, and it seems that this move will have a significant impact on the price of the coin.

Litecoin has posted gains in each of the past four months, its longest monthly streak since August 2017. Prices rose 3.8%, 46.3%, 31.15% and 22% in January, February, March and April, respectively, according to CoinDesk data.

It makes sense to link Litecoin's rise to the halving, as this process leads to a reduction in the supply of the cryptocurrency. After August, miners will receive 50% less revenue per mined block, and there will be significantly less Litecoin in the software ecosystem, which could lead to a supply shortage.

The market is always forward looking and tends to price in such demand/supply change events months in advance.

Supporting this view is historical data, which shows that Litecoin’s price rose sharply in the seven months leading up to its first halving on August 25, 2016.

Litecoin Halving and Price History

At that time, LTC bottomed out at $1.12 in January 2015, reached $8.72 in July, and fell back below $4.00 before August 25. Before the halving, it rose 7.78 times from the historical low to the high.

What should we do?

This round of gains may not be over yet, as there are still more than two months before the halving, and the positive effects of the Litecoin halving have not yet been deeply fermented and reflected in the price, and there is still room for it. In addition, as the event approaches, the meaning of "halving" and its historical impact on prices will begin to receive more attention, which may attract more buyers to enter the market.

Looking up to $171?

History is always surprisingly similar. The halving in 2015 increased by nearly 8 times in total. Since this round, Litecoin has fallen to the bottom of $22 in December and has risen by more than 395% to the current $87 (May 23). There is still room for growth. We can refer to the multiples of the previous round to see how much this round of growth will increase, so it can reach $171. The premise is that Bitcoin will not fall sharply in the next few months and will not bottom out again.

Note

As the Litecoin halving gets closer, when all the media and individuals are talking about it and the price surges, it may trigger a "selling effect" of profit taking, for example, this is what happened to Litecoin a few weeks before its first halving in 2015. As the date approached, investors began to lock in profits by selling Litecoin. Litecoin peaked in July 2015, and a month later, the returns halved. In fact, at the end of the month when Bitcoin halved, the price of Litecoin was nearly 40% lower than when it started. This further confirmed that investors temporarily lost interest in Litecoin after the highly anticipated Litecoin halving event.

The timing of this round of sharp rise is likely to occur in July. If there is a rapid upward trend within a period of time, you should be cautious in chasing high prices, and you can consider selling the stocks when you make profits.

If you firmly believe that this Litecoin halving and next year's Bitcoin halving will be the start of a bull market, and you are willing to hold Litecoin for a long time and the entry cost is very low, you can hold it for a long time without worrying about a short-term pullback after the positive news is exhausted.

What is Litecoin

In early 2011, like most geeks, Lee Qiwei was also mining, but he soon discovered the problem with Bitcoin, that is, the transaction speed was too slow. BM and Vitalik Buterin also discovered this problem at the same time. BM later created EOS, and Vitalik Buterin created ETH, which is a later story.

Li Qiwei's idea is different from BM and Vitalik, he just wants to improve Bitcoin and make a lighter Bitcoin. Its characteristics are fast block generation and confirmation speed, the total amount of coins is four times that of Bitcoin, and the scrypt encryption algorithm it uses is easier to mine than Bitcoin.

Another feature is that it is a pioneer of Bitcoin, or a guinea pig for Bitcoin experiments. When Bitcoin was arguing about whether to use Segregated Witness and Lightning Network for expansion, Litecoin tried it first. Only after it was successfully deployed and ran safely did Bitcoin stop arguing and deploy. Charlie Lee also shouted the slogan of Bitcoin Gold Litecoin Silver.

Litecoin founder Charlie Lee

Charlie Lee is the creator of Litecoin and he also served as the Director of Engineering at Coinbase. Charlie Lee was born in the Ivory Coast and later moved to the United States and received a master's degree in computer science from MIT. Charlie Lee has worked for many technology companies, including Google. Charlie Lee stumbled upon Bitcoin and blockchain technology in 2011 and quickly became fascinated by the idea. However, he saw that Bitcoin also had flaws and that none of the altcoins could really offer something different and new. So he began working on making a better cryptocurrency and launched Litecoin - a cryptocurrency with faster transactions, a larger maximum supply, and a hashing protocol based on scrypt that is fast enough to become one of the most popular cryptocurrencies on the market. After creating Litecoin, Charlie worked as the Director of Engineering at Coinbase, but has now returned to Litecoin full-time. He is also known as the Master of Escape because of his successful sell-off when the price of Litecoin reached its peak in early 2018. He also predicted that if you want to invest in Litecoin again, you have to wait until it falls to around US$20. In December 2018, Litecoin reached the lowest point of this round at around US$22 and then began to rebound. The currency circle exclaimed at the great prediction.

Litecoin major events summary

On October 8, 2011, the Litecoin Genesis Block was born, and 5 days later, the Litecoin network was officially launched.

On July 3, 2013, Mt.Gox launched an API for LTC transactions in preparation for its official launch.

On March 19, 2014, Huobi.com officially launched Litecoin trading.

On August 26, 2015, Litecoin experienced its first halving. Currently, each data block can generate 25 Litecoins. The next halving will be around August 6, 2019.

On July 3, 2016, the Litecoin kernel development team and the Litecoin Association released the "Litecoin Official 2016 Development Roadmap", announcing that they would release a new version with features such as "Segregated Witness", "Lightning Network", and "Smart Contracts". Litecoin was the first to experiment with some of the things that have been the subject of much debate in the Bitcoin community.

On December 23, 2016, bitcoin.com reported that the Litecoin community plans to vote on whether to adopt Segregated Witness.

On February 9, 2017, Charlie Lee revealed in an AMA event at 8btc that he planned to force the implementation of Segregated Witness. The next day, Litecoin’s main network will start the activation process (voting) of Segregated Witness.

On April 6, 2017, more than 70% of the miners’ hashrate voted in favor of Segregated Witness, and the price of Litecoin reached $11.17. Overnight, the market value of Litecoin increased by about $140 million.

On April 10, 2017, Litecoin's daily trading volume exceeded $10 million, and Charlie Lee stated in an article on the SegWit website that the release candidate code of SegWit was marked and the beta version was about to be released.

On April 12, 2017, the BW mining pool voted to support Litecoin Segregated Witness.

Segregated Witness was launched on May 8, 2017.

On June 22, 2017, the Litecoin Lightning Network was launched.

On December 21, 2017, Charlie Lee announced that he would liquidate his Litecoin holdings, citing the reason of avoiding "conflict of interest". Since the announcement of the news, the market value of Litecoin has dropped sharply, from the second highest in history to the seventh place now.

September 14, 2018, Wright Global Summit.

On February 7, 2019, Litecoin announced that it would implement Beam’s “Mimblewimble” protocol to achieve extended blocks and privacy.

On March 19, 2019, Huobi OTC launched Litecoin.

On May 1, 2019, Vertbase launched support for buying Litecoin with Euro and British Pound.