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The Litecoin network is gearing up for its next halving event, where the block reward will reduce to 6.25 LTC per block.

Developers on the altcoin network are gearing up for the block reward to be slashed in half in what will be the coin’s third cycle. The 11-year running network hit several critical milestones in 2022. Among them were new wallet and transaction count all time highs on the network, and the MWEB privacy-focused launch.

Litecoin whale address count climbs

Taking place every four years (epoch), the Litecoin halving is a key event where block rewards are slashed in half. As the ‘Silver-to-Bitcoin’s Gold’, Litecoin’s supply is hard-capped at 84,000,000. The fixed supply makes the coin scarce and deflationary. The point of the halving is to preserve purchasing power of the asset. So far, there have been two halvings since the coin’s launch in 2011.

Contrary to comments by a number of misinformed Crypto influencers, Litecoin is not a ‘fork of Bitcoin’. Litecoin is a fully-fledged public money (with a high-legitimacy commodity status) that had a demonstrably fair launch in 2011. The first halving happened in August 2015, after which the block reward was reduced to 25 LTC.

Notably, the prior two halving’s resulted in a rally in LTC’s Dollar and fiat price. Similarly, another post-halving price boom is widely expected in the second half of 2023, as the event is scheduled for August 2023. Per historical data, each 50% reduction of newly minted coins resulted in two events: a surge in the asset’s price and a crypto bull market that ensued in the following years, leading up to the BTC halving.

Litecoin halving events. Source: Tradingview

While history does not necessarily indicate future performance, blockchain epochs establish a framework for price appreciation within the context of an infinitely expanding fiat monetary supply. As noted, Litecoin had a historic year in 2022, registering robust fundamental growth despite the bear market. Per the above chart, Litecoin has historically gone up in the months following a halving event (denoted by a lightning icon).

The latest data from analytics firm, Santiment, also indicates that whale wallets are purchasing Litecoin in size. Specifically, the LTC/USD ratio Vs. Bitcoin remained high as the number of large wallet addresses climbed since May 2022.

LTC/BTC price ratio has increased 130% since June 12, 2022. Another key milestone was the jump in wallet addresses with over 1,000 LTC – the highest in two years. In other words, Litecoin has numerous tailwinds behind it.

Litecoin analysts and advocates have long argued that Litecoin’s fair market capitalisation in Dollar terms should approach the BTC-LTC supply ratio (21:84) once the network effects pick up. Assuming Bitcoin’s current $321 billion remained static, that would put Litecoin’s fair market cap. at around $80 billion, as opposed to the current $5.4 billion. At $1,000 per coin, LTC will have reached the ‘Silver to Bitcoin’s gold’ supply ratio in Dollar terms, at current valuations.

It goes without saying that such prices may not be realised until a few years, if ever.


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