- Litecoin price is likely to begin its post-halving recovery with two catalysts in the crypto ecosystem.
- Grayscale’s win against the SEC and the massive surge in Litecoin transactions on the crypto payment processor BitPay could fuel a recovery.
- Nearly 5 million addresses have held Litecoin for over a year, showing confidence in the current market conditions.
Litecoin network’s long-term holders continue to show confidence in the altcoin despite the price drop post-halving. A recovery in the altcoin is likely in the presence of recent catalysts in the crypto ecosystem.
Litecoin price trades for $67.77 on Binance at the time of writing. The altcoin has yielded a 4.58% gain for holders over the past week.
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Litecoin price could recover with these two bullish catalysts
Grayscale, a digital asset management company, landed a historic win against the US Securities & Exchange Commission (SEC), acting as a catalyst for altcoins in the crypto ecosystem.
The asset manager’s victory in the spot Bitcoin exchange-traded fund (ETF) case fueled bullish sentiment among investors in the crypto ecosystem with top-ten assets yielding gains for holders overnight.
Grayscale’s win is, therefore, likely to act as a catalyst for Litecoin’s recovery. LTC ranks 15th in terms of market capitalization among cryptos.
IntoTheBlock, an on-chain data intelligence tracker, observed that nearly 5 million addresses have held Litecoin for over a year. This is double the count from last year’s 2.55 million and signals rising confidence among LTC holders.
Litecoin addresses by time held as seen on IntoTheBlock
Alongside confidence from long-term holders, there has been a notable increase in LTC transactions, according to crypto payment processor BitPay. Litecoin has seen a 50% increase in the percentage of use on BitPay, between spring and summer.
From spring to summer, Litecoin has seen a 50% increase in the percentage of use on @BitPay – The the leading crypto payment processor in the world.
— Litecoin Foundation ⚡️ (@LTCFoundation) August 26, 2023
The above developments are likely to catalyze a recovery in the altcoin. At the time of writing, Litecoin price is $67.77, and the asset has yielded 21.548% gains for holders over the past year.
Litecoin halving FAQs
Litecoin’s third block halving event is scheduled to take place at a block height of 2,520,000, which is estimated to happen around August 3. The current block height is 2,511,587. The first halving took place in 2015 after the block height was 840,000. The second Litecoin halving event occurred in 2019 when the total block height hit 1,680,000. This event takes place roughly once every four years.
Halving is an important event for both miners and investors. After halving, the block rewards are slashed in half, as the name suggests. The first halving event in 2015 reduced the block reward from 50 to 25 and the second one in 2019 halved it to 12.5. The third halving, which is scheduled on August 3, will further reduce it to 6.25. This means that miners will go from receiving 12.5 LTC for mining a block to 6.25 LTC after the third halving.
After a halving event, the emission of LTCs is cut in half, which effectively triggers a reduction in the Litecoin supply. If the demand remains more or less the same, it creates a negative supply shock. The same dynamics are seen if the demand for LTC increases. Due to the reduced supply and high demand, it would trigger a rally in Litecoin price. But traders often anticipate this trend and try to get an exposure to LTC before the halving, causing a premature rally and a sell-the-news drop on the day of the event.
Following a halving event, miners receive 50% fewer rewards for every block they mine and this creates scarcity in the altcoin, reducing the circulating supply of the asset. The event’s purpose is to control the inflation rate of Litecoin. Halving is therefore a key event that influences the asset’s price and market capitalization over time.
From a technical perspective, it is not any different. But from an investor and miner perspective, there are lot of differences. For example, the concept of halving remains the same for both assets, but due to relatively lower total supply of 21 million and first-mover advantage, Bitcoin’s network effect and large market capitalization as a result has a significant impact on the crypto ecosystem as compared to Litecoin. Additionally, the effect of halving events is more pronounced for Bitcoin, because of the asset’s dominance, hence BTC halving receives more attention.
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Source: FX STREET