The Litecoin block reward for LTC was reduced from 25 LTC to 12.5 LTC Monday, as the halving of the block reward took place without a hitch. The reduction in mining reward occurs with every 840,000 blocks of Litecoin mined and occurs every four years. It is next scheduled to occur in August 2023.
The price of LTC/USD subsequently rose above $100, but then receded. At the same time as the LTC spike, Bitcoin was also experiencing a rally — driven by increased geopolitical tensions between the U.S. and China.
Decreased Rewards Will Reduce Miners, Litecoin Supply
With miners already struggling to survive before the halving, the reduction in rewards will put more pressure on their operations and drive many out of business, as Litecoin founder Charlie Lee has predicted. Mining is an expensive operation, requiring specialized hardware and ever-increasing electricity costs necessary to keep up with the ever-increasing difficulty.
The decreased supply that comes with miners giving up means fewer Litecoin to go around. This gives credence to the conventional view that this shift in the fundamentals of Litecoin will cause the price of Litecoin to rise. Some argue, however, that the anticipation of the lower supply is already baked into the price at the time of the halving, meaning that the actual halving itself has little effect on the price.
The increased media attention that goes along with the Litecoin block reward halving process can also generate buying interest. Litecoin began 2019 at around $30 USD and rose to around $145 in June before settling in at just under $100 before the halving.
The first halving took place on August 25, 2015 and took the block reward from 50 LTC down to 25 LTC. Roughly 75% of the total supply of Litecoin has thus far been mined. The total supply of Litecoin is capped at 84,000,000 LTC.
You can learn more about Litecoin at its official site: https://litecoin.org/