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Litecoin halvening – what next?

Litecoin halvening – what next?


Reduced block rewards for Litecoin miners raise questions for hashrate and price – with implications for Bitcoin’s own halvening next year.


Litecoin hit a major milestone earlier this week, with its third halving. Block rewards fell from 25 LTC to 12.5 LTC. Like Bitcoin, Litecoin halvings happen every four years, so the next one will take place in 2023. 


Litecoin is worth watching because it often signals what Bitcoin will do. It’s not exactly the same as Bitcoin, of course. But Litecoin is a large, well-established proof-of-work network, with a large trading community and high liquidity. So it’s a reasonable way of gauging Bitcoin’s future moves.


Litecoin has a total supply of 84 million LTC – four times the supply of Bitcoin. 63 million, or around three-quarters of these, have now been mined. With 12.5 new LTC being created every 2.5 minutes, that’s 2.6 million new LTC per year, or a little over 4%.


Litecoin and Bitcoin

Since block rewards are cut in half, it’s reasonable to expect some smaller miners to turn off their rigs – it becomes uneconomical to mine unless the price rises to compensate for the reduced supply. Just after the halving, Litecoin creator Charlie Lee tweeted,’Since the halving, 12 blocks have been found in 17 minutes. Seems like miners have not shut off their hashrate at all. Instead, we are mining at a rate of a block every 1.4 minutes on average, which is much faster than the expected 2.5 minutes. Litecoin network is healthy!’


It’s still early days, but can we gain a picture of what’s happening right now? And whether the same might occur for Bitcoin at its own Halvening in May 2020?


Firstly, price spiked around the halving itself, before dropping sharply. Overall, though, LTC is up over 200% in USD this year, even if it’s down in BTC terms.


Hashrate does seem to be holding steady. It’s still a little early to know for sure, but it appears that most miners have factored in the change. No doubt some will go offline in the coming weeks, but for now, little seems to have changed.


All of this suggests that miners and traders have been planning well in advance. The reduction in block rewards was priced in over a period of around 6 months. 


If we see the same for Bitcoin – if – then that looks like a major Christmas rally could be on the cards, and the network will remain strong post-halving.

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