• This article discusses the upcoming Bitcoin halving in 2024 and how Litecoin’s recent halving may provide some insights.
• Litecoin has undergone four halvings, but the price effects of these events have not been consistent.
• The small sample size makes it difficult to draw any conclusions regarding the potential impact of Bitcoin’s next halving.
This article discusses the upcoming Bitcoin halving in April 2024 and how Litecoin’s recent halving may provide insight into what could happen when miners receive half as much new supply. In addition, we explore the past performance of Litecoin through its own four-halvings and analyze whether there is a tangible relationship between price action and reductions in issuance rate.
Litecoin underwent its fourth halving just over a week ago on August 5th, cutting the block reward from 12.5 LTC to 6.25 LTC per block. Looking at past performance, the second halving in 2015 saw strong price appreciation for Litecoin while prices fell after third one in 2019 before recovering along with most other crypto assets due to COVID-related news flow late last year. It is too soon to draw conclusions about this fourth event however, making it hard to predict what will happen when Bitcoin undergoes its own similar event next year.
The small sample size thus far makes it difficult to conclude with confidence whether or not Litecoin’s past halvings had a tangible effect on prices in the short term or not. Furthermore, Bitcoin is a very different proposition compared to Litecoins so tracking its performance going forward will be interesting as we approach April 2024 where miner rewards will be cut by 50%.
Whether or not Bitcoin’s next halving will be priced-in remains a fervent topic of debate among cryptocurrency enthusiasts which this article attempts to shed light on by looking at how previous Litecoin events may have impacted prices. While our analysis does not offer compelling evidence of an immediate relationship between supply reduction and higher prices, only time will tell what happens when miners receive half as many Bitcoins per block early next year.
• The next Bitcoin halving is slated for April 2024, reducing miner rewards from 6.25 BTC per block to 3.125 BTC per block • Litecoin recently underwent its fourth halving but it is too soon to draw conclusions regarding its potential impact on prices • Bitcoin is very different from Litecoin so tracking the latter’s performance ahead of April 2024 will be interesting