The Unexpected Effects Of The Litecoin Halving

[Vertex_ICO]

Litecoin experienced its second halving on 5 August 2019. This means that the rewards for producing a block on the Litecoin network are now 12.5 LTC, half of the previous 25 LTC reward. Halving on the Litecoin network occurs roughly every four years. What usually interests users is the overall effect that a halving has on a network. Hence, the question, what were the unexpected effects of the Litecoin halving?
Coin halving is usually a big occasion for cryptocurrency users, for miners and traders alike. The halving event is a major fundamental indicator to price and other elements within the network of the concerned cryptocurrency.

Pre-Halving Analysis of Litecoin (LTC)

Analyses and predictions come ahead of the halving of any given cryptocurrency. This was the same with Litecoin as many members of its community expected that there would be a surge in price for the first fork of Bitcoin.
Ahead of the event, even the creator of Litecoin (LTC), Charlie Lee, explained why he expected the price of Litecoin to go up after halving. Away from organic reasons, Lee tied his expectations to community sentiments. He explained how the behaviour of people will determine price movement, rather than actual economic factors of demand and supply.

He said;
“So a lot of people are buying in because they expect the price to go up and that’s kind of a self-fulfilling prophecy. So, because they’re buying in, the price does actually go up.”

So, did Litecoin price actually go up after halving?

At the beginning of 2019, LTC around $30. This was as a result of the general bear market that greeted the crypto industry after the ICO boom of 2017. From boom to present, Litecoin dropped from an all time high price of $375. As the market picked up after Q1 2019, Litecoin also joined the recovery trend trading around the $100 region before dropping below it ahead of the impending halving.

The Litecoin Halving Effect

Just before the halving, the Litecoin price was at $79. As the news broke of the halving the Litecoin price jumped to $100. This is the initial answer to the question “how has the halving affected Litecoin”. The surge did not last though, as soon afterwards, a retracement kicked in and overall market sentiments seemed to overshadow the effects of the halving.

Halving implies that the reward for miners in producing a bock drops by 50%. The amount of work involved does not change, nor does the electricity consumed. Therefore, many miners seem to go out of business when halving occurs. Some of the smaller miners who may not be able to keep up with the cost implications may go out of business and engage is selling off a part of their holdings. This could lead to a bear market in the short run.

A contrary view suggests that the decreasing supply of Litecoin in this case will create scarcity. By economic laws, this means that there will be increased demand for the Litecoin, hence engineering a hike in the price.

No matter your position on the argument, you must consider the overall market conditions as well, especially with respect to Bitcoin, the pioneer of cryptocurrency. For instance, a few weeks after the Litecoin halving, when a lot of people expected prices to soar higher, it fell below the pre-halving mark. At the time of writing, the Litecoin price is around $70.

What’s Next After The Unexpected Effects Of The Litecoin Halving?

The prevailing sentiment is that funds are currently moving away from altcoins into Bitcoin at the moment. Proof of which lies in the Bitcoin dominance which stands at 69%, at the time of writing.

In this industry, everything is usually factored into the price of the token; hashrate, mining difficulty, community sentiment and other elements. Therefore, if you want to understand the market conditions, you need to consider a robust approach that involves numerous factors.

Price is a product of demand and supply. However, other factors which most industry participants consider to be temporary have suppressed the Litecoin price so far. Many traders are using this opportunity to jump into the market, using peer-to-peer platforms like Vertex.Market to purchase Litecoin at its suppressed price. This is in anticipation of an eventual response to the natural forces of demand and supply.

In paying attention to the unexpected effects of the Litecoin halving, it is very clear that a wide perspective must be assumed, and the analysis must also consider a long term effect. Hence, at the time of writing, we may not assume that the effect of the Litecoin halving has fully kicked in. Until the Bitcoin dominance subsides, the crypto market will still maintain a partial lopsided outlook.

https://medium.com/@official_83664/the-unexpected-effects-of-the-litecoin-halving-a6c8fde3c62a

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[aprilnot]

Litecoin goes up, yes that's right. this can be proven, because before halving the price of LTC was $30 and when approaching halving the price rose by more than $100. basically what influenced the increase in LTC was not halving, but rumors caused by Halving. many make analyzes and predictions about halving, causing FOMO. when the LTC market began to overbought, a fall began.

You're right about the miners who sell their assets after halving, they feel that after halving the price cannot be higher. even though the reward they get has been reduced. this is the starting point the bear market for litecoin. and this situation is made worse by the dominance of bitcoin. but for the long term, I think ltc still has the possibility of going up. rewards Perblock decrease and there is no decrease in demand. if dominance  bitcoin can decrease. I think the funds that were in bitcoin, would be diverted to altcoin like Litecoin.

[knuckey]

The halving moment that happened some time ago was not in line with everyone's expectations, but at least yesterday's halving had triggered price movements for Litecoin and was proven, even though the increase was only temporary. I think there are many people who use the halving time and I am sure some of them have made a profit from the halving moment. By the way, I really enjoyed your writing.

[NeuroticFish]

It's a good read and it touches an interesting point. I've seen sometime in the past a halving expected for Dogecoin as a savior and nothing happened. Now the same happened for Litecoin: somehow the halvings most expected to rise the price have only a shot-lived speculative effect. I kinda fear that this could also be the outcome for Bitcoin too in 2020.

[traderethereum]

Although the Litecoin price does not increase so high after halving, I believe that it will increase someday.
I don't feel to worry, and I enjoy to see the litecoin price fluctuated at a price now, and it's only a matter of time to see Litecoin price will increase.
Maybe we don't know when it is increasing, but in the future, our expectation will become true, so we should prepare for the coming.
But like the other coins, Litecoin will have time to get down again following with bitcoin price, and we don't know when the Litecoin price can go up to the higher rate.
It is interesting to see the market movements today because the cryptocurrency seems to want to make a correction again.

[Red-Apple]

the problem is that people always expect the same thing that happens with bitcoin to be repeated for altcoins! we have seen time and time again where people buy a shitcoin that is worth so little thinking just because bitcoin went from $0.01 to $20000 then that shitcoin can do the same. then they get disappointed as they realize it was a shit-coin then they dump it.

the problem with litecoin just like any other altcoin is that it has no real world applications. it is the exact copy of bitcoin with no innovation. the only thing they changed was the mining algorithm and the block time which was supposed to be ASIC resistant (lol).

so no matter how the supply is, it still lacks demand which is why it couldn't go up in price when it had the halving. the hype was also not enough to help pump it like previous times specially since the altcoin market is in dumping mode these days.

[crazy-pilot]

Here is a lot of useful information, thanks. I agree with you, buddy. In my opinion, the price of Litecoin will begin to rise as soon as the dominance of Bitcoin begins to decline and then the whole market turns green.

[bartolo]

We will probably have to wait until market conditions change to check the actual effect of halving on Litecoin. After all, people see altcoins as a unique thing and altcoins are in a bear market so deep that it does not matter how many halvings or news you put on the table right now.

[caffu chino]

We cannot predict the price of the coin anymore, even if it is going to halving.
Cryptocurrency market nowadays are not good, we can see most of the coins value are not increasing in this year.
The effect of Litecoin halving is, there are many LTC miners retired, because they get lesser coin, just that. 

yes you're right, predictions and analysis don't work right now. I thought it was going to be pumped at halving, but it turns out it was only FOMO caused by speculation a few months before halving.

the results from halving this time are not very good. many people lose because they think that after halving the price of litecoin will be pumped up, the reality is now a dump for LTC.

[Vertex_ICO]

Great piece, nice to see all the prices laid out in one sitting. It seems to be regaining value day by day. Wonder if we'll see it will recover to the "hype" value of $100.

Thank you!

[Vertex_ICO]

The halving moment that happened some time ago was not in line with everyone's expectations, but at least yesterday's halving had triggered price movements for Litecoin and was proven, even though the increase was only temporary. I think there are many people who use the halving time and I am sure some of them have made a profit from the halving moment. By the way, I really enjoyed your writing.

Thank you, we are glad you enjoyed the article!

[Vertex_ICO]

Here is a lot of useful information, thanks. I agree with you, buddy. In my opinion, the price of Litecoin will begin to rise as soon as the dominance of Bitcoin begins to decline and then the whole market turns green.

It is our pleasure 

[Bisbee]

Litecoin price rose a few months before halving, so there was no point in expecting a big price increase after halving. I think that a decrease in the issue of new coins will positively affect the price of LTC, but in the longer term. Because the reduced size of supply while maintaining demand at the same level always positively affects the price of any product.

[poornamelessme]

the problem is that people always expect the same thing that happens with bitcoin to be repeated for altcoins! we have seen time and time again where people buy a shitcoin that is worth so little thinking just because bitcoin went from $0.01 to $20000 then that shitcoin can do the same. then they get disappointed as they realize it was a shit-coin then they dump it.

the problem with litecoin just like any other altcoin is that it has no real world applications. it is the exact copy of bitcoin with no innovation. the only thing they changed was the mining algorithm and the block time which was supposed to be ASIC resistant (lol).

so no matter how the supply is, it still lacks demand which is why it couldn't go up in price when it had the halving. the hype was also not enough to help pump it like previous times specially since the altcoin market is in dumping mode these days.

Actually I think most people didn't expect ltc to react in the same way as btc ... they expected it to repeat what occurred when ltc halved years ago. But they were wrong, the price rise was built in around 2 months before the actual halving.

Which isn't unusual, history doesn't always repeat in the same exact manner. I wouldn't call LTC a shitcoin however, nor act like no altcoin out there has any real world applications. Many alts are better than btc from a technical level, and it's not like btc really has a real world application either unless you consider a 'store of value' as an application -- but that is pretty arbitrary, not like btc is designed specifically for that purpose.

Anyway, I don't disagree about the real world application thing entirely, just that I wouldn't throw that phrase around as a blanket term for every coin in existence. LTC has a problem where it's not differentiated enough from BTC ... in many ways it's a better currency than BTC, but so are a zillion other alts.

[davinchi]

The problem that I have been having with some of these altcoins is that we have been boosting majority of them with artificial things such as news and others, meanwhile, what should really boost the value of a coin should be the real use case which would make the value stable and void of dumping.

When the news of halving came, I knew that there was going to be people that would start investing because they felt the halving will have effect, but the moment they realized that the halving is not going to have effect, they had to pull out in other to avoid being stuck when other investors starts dropping their own investment. Many of these solid coins like Litecoin have real use case, but they have really failed to let their usefulness be really known through their push.

[poornamelessme]

The problem that I have been having with some of these altcoins is that we have been boosting majority of them with artificial things such as news and others, meanwhile, what should really boost the value of a coin should be the real use case which would make the value stable and void of dumping.

When the news of halving came, I knew that there was going to be people that would start investing because they felt the halving will have effect, but the moment they realized that the halving is not going to have effect, they had to pull out in other to avoid being stuck when other investors starts dropping their own investment. Many of these solid coins like Litecoin have real use case, but they have really failed to let their usefulness be really known through their push.

Agreed, real world usage should trump hype ... but it doesn't always.

It's kind of interesting how this market has been playing out. LTC did have news of a real world use sort of announced around the halvening, but it's kind of a dinky real world use.

LTC was named the cryptocurrency of the Miami Dolphins. During the bullrun days, this would cause a coin to go soaring. But these aren't those days. And unfortunately they kind of limited LTC's use to buying some sort of raffle vs buying actual tickets AND they also allowed BTC to be used as well.

Which is basically LTC's problem, it needs to differentiate itself if it wants to be used as a currency. If folks can buy using both LTC and BTC, LTC won't get as much attention. And compared to something like Dash, why would LTC be better as a currency? It isn't really. It doesn't fill a niche like ETH or some other alts either.

[Vertex_ICO]

Litecoin goes up, yes that's right. this can be proven, because before halving the price of LTC was $30 and when approaching halving the price rose by more than $100. basically what influenced the increase in LTC was not halving, but rumors caused by Halving. many make analyzes and predictions about halving, causing FOMO. when the LTC market began to overbought, a fall began.

You're right about the miners who sell their assets after halving, they feel that after halving the price cannot be higher. even though the reward they get has been reduced. this is the starting point the bear market for litecoin. and this situation is made worse by the dominance of bitcoin. but for the long term, I think ltc still has the possibility of going up. rewards Perblock decrease and there is no decrease in demand. if dominance  bitcoin can decrease. I think the funds that were in bitcoin, would be diverted to altcoin like Litecoin.

FOMO reaks havvok on the markets today, from bad predictions to even worse illogical claims, this can be for a few reasons.

Some believe that the current unbalanced market that is cryptocurrency (More traders that people using it) is causing a lot of the turmoil and volitility due to the fact that traders and whales manipulate the market intentionally for a profit, where as the person buying groceries or running a business cannot predict nor understand these market fluctuations and makes hasty decisions to safe gard his funds, creating a domino effect.