Abstract
Litecoin halving is an exciting event that occurs every four years when the number of Litecoin mined per block is cut in half. As a confident prediction, the next Litecoin halving is expected to occur between August 4-8, 2023. With two previous halving cycles, Litecoin has shown a significant increase in price¹, proving that this event is a game-changer for crypto investors.
A 50% reduction in the number of Litecoin minted has resulted a chain of events: a surge in the asset’s price, a crypto bull market that ensued in the following years, leading to BTC halving which skyrocketed the whole industry, while BTC made a significant jump between $3.5k and $69k. Once Litecoin did 13,000% after halving but will history repeat itself this time providing us with massive bull rally? Discover the answer below!
Why LTC halving matters?
Despite the fact that the Litecoin halving and the Bitcoin halving are completely different events, there is a direct correlation between these two assets, and not just a correlation, but a very close one - updates. In other words, the changes that Litecoin goes through are subsequently adopted by the Bitcoin network.
- Segregated Witness (SegWit): Litecoin was the first cryptocurrency to implement SegWit in 2017, which was later applied to Bitcoin.
- Lightning Network: Litecoin was also one of the first cryptocurrencies to adopt Lightning Network, which is a second-layer scaling solution that allows for faster and cheaper transactions.
- Atomic swaps: Litecoin was the first cryptocurrency to perform an atomic swap with Bitcoin in 2017.
Currently, NFTs on the Litecoin blockchain are also being tested, and we know that there are certain developments with NFTs and Bitcoin as well.
Litecoin enthusiasts can now create NFTs and tokens with OmniLite, which is a fork of Bitcoin. Developers are forking Bitcoin ordinals to give older proof-of-work networks such as Litecoin their first set of non-fungible tokens (NFT). Bitcoin contributor Anthony Gurrera posted a repository to GitHub that forked the Bitcoin Ordinals protocol to Litecoin. He also placed a copy of MimbleWimble, a privacy and scalability upgrade deployed on the Litecoin network in 2022, to the Litecoin network, making it the first NFT on Litecoin.
Along with the two-fold reduction in rewards in these two networks and as a result, the strongest rise in demand, mining and NFTs supported by these two blockchains will become the next big thing of upcoming crypto rally as far as AI and IPFS.
Investing opportunities
Reflecting on investment opportunities in the context of Litecoin halving, we cannot ignore Bitcoin halving, as Bitcoin still dominates all cryptocurrencies and the processes that occur with it have the strongest impact on the future development of market situations and price movements.
Chart of LTC/USD prices — candlestick, and BTC/USD — orange horizontal line on top. Dates of LTC (gray) and BTC (orange) halvings are marked with lines and arrows. Turquoise and purple lines are historical support/resistance levels for LTC.
The chart above is proposed to be viewed in periods.
There are three halving periods for both networks — the portions of the chart where the gray and yellow lines go in a row.
1st period — 2015-2016
This period is characterized by a smooth accumulation period for LTC. The accumulation dynamics also persisted after the BTC halving, while BTC itself grew dynamically until its own halving. After the BTC halving, the price of Litecoin rose by 12,704% from $2.89 to $370.32. It is important to note that this period is also characterized by very low liquidity for the cryptocurrency market — these are very early days for cryptocurrencies and this must be taken into account in the analysis.
2nd period — 2019-2020
Characterized by a long accumulation for both assets. Immediately after the LTC halving, it enters a price corridor in which it trades until the beginning of the COVID19 pandemic and a short but strong global market correction, instantly rebounded after the liquidity injection conducted by the US Federal Reserve. BTC had a similar fate. Until the BTC halving itself, prices were in this corridor, and the exit from it skyrocketed both BTC and LTC. The price of Litecoin increased by 425% from $83 to $438. It is worth noting the impact of the COVID19 pandemic on the price shake-up of both assets — the global shock does not necessarily have to repeat itself, which means that in the future, the market is unlikely to give participants such a powerful spill.
3rd period — 2023-2024
Upcoming halvings for both networks. A moment of forecasts and assumptions. Despite the fact that in the first two periods, the charts may look "noisy" due to low liquidity or major global events, we suggest focusing on the general positions of these four events:
- LTC halving - from an investment activity perspective, it can be called a "accumulation trigger."
- The period between LTC and BTC halvings - may become the most successful time to accumulate positions for the 2024 bull rally.
- BTC halving - from an investment activity perspective, it can be called a "distribution trigger."
- Repeat of historically established dynamics - may mean that the approximate ranges of LTC growth will be from $130 to $687.
- Currently, the price of LTC "jumps" onto a historical support level (purple horizontal line), from which future bull rallies may begin.
- Trading ABOVE this level means a favorable time for making major purchases and investments with 12-36 month goals.
Summary
In this article, we have discussed why Litecoin halving matters and how it can impact the cryptocurrency market. We have also discussed how Litecoin halving and Bitcoin halving are closely linked and how the changes experienced by Litecoin are subsequently adopted by the Bitcoin network, opening up investment opportunities for modern investors.
The BeMine team suggests making independent investment decisions based on personal research and a private approach to risks.
--Regards, team BeMine
