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Contrary to Bitcoin‘s (BTC) halving, one of the leading altcoins, Litecoin (LTC), did not receive the expected attention after its block reward halving. Hours after the halving, LTC’s price dropped more than 6% and is currently trading at $86.78 with a market capitalization of $6.4 billion.
Litecoin’s Block Reward Decreased from 12.5 LTC to 6.25 LTC
The highly anticipated block reward halving of the Litecoin Blockchain took place on August 2nd at block number 2,520,000, reducing the reward per block for miners from 12.5 LTC to 6.25 LTC.
The block reward halving for Litecoin was an event where the “buy the rumor, sell the news” trading strategy was adopted. Data provider Santiment noted that LTC’s social dominance increased and panic among many investors emerged as volatility intensified, stating, “This period of instability proves to be difficult to remain patient. What we have recently witnessed is a strong investor capitulation.”
Historical price data suggests that Litecoin’s price declined for several months following the previous two block reward halvings. The leading altcoin, which increased its value by 60% from the beginning of the month until the beginning of July, reaching over $112, has already lost more than 6% of its value after the block reward halving.
Kyle Doane, a trader at Arca, explained the decrease in investor interest, stating, “Longing LTC was primarily done at the beginning of the year, when the narrative of the block reward halving was in focus. Since then, the market has shifted its focus to the spot Bitcoin ETF applications, causing this narrative in LTC to lose its appeal.”
Will Bitcoin Share the Same Fate as Litecoin?
Investors and top analysts in the cryptocurrency market are quite optimistic about Bitcoin’s major block reward halving expected to occur in April 2024. Many analysts believe that Bitcoin is rapidly approaching its block reward halving and a strong price rally is imminent. However, the lack of a surge in Litecoin’s price following its block reward halving raises questions about whether Bitcoin will share the same fate. Past data shows that Bitcoin has followed a different trajectory than Litecoin, with significant price rallies following its block reward halvings.
Bitcoin, the largest cryptocurrency in the market, typically experiences significant price movements during block reward halvings, showing a tendency to rise before and after the halving. For example, after the block reward halving in May 2020, Bitcoin’s price increased nearly seven times in the following year before experiencing a sharp decline. The fact that major asset management companies like BlackRock have shown interest in BTC indicates that such a possibility is highly unlikely.
