Litecoin Halved Its Market Supply This Morning

The world’s fourth-most valuable cryptocurrency reduced its market supply this morning. Litecoin, which positions itself as a cryptocurrency for daily use, halved its block rewards for miners from 25 litecoins to 12.5 litecoins.

Litecoin is expected to have a total market supply of 84 million coins, four times that of Bitcoin. As of this writing, 63 million coins have already been mined. The reduction in block rewards occurs every four years for Litecoin.

All else being equal, the halving will reduce the Litecoin supply in the market from roughly 14,400 LTC every 24 hours to 7,200 LTC during the same time period. It is meant to create coin scarcity in the markets and push up its price.

As of this writing, Litecoin is trading at $99.02, up almost 6% from its price 24 hours ago. The cryptocurrency reached a peak of $141.44 this past June.

A Rebound This Year

Litecoin suffered a steep drop in its price during the crypto slump last year, losing almost 90% of its value. But the sentiment change among traders and investors with regards to cryptocurrencies in 2019 has affected Litecoin’s price positively.

During the first quarter, Litecoin’s price jumped 100 percent to $61. The amount of computing power dedicated to mining power had increased to 523.81 TH/s by July 14 from 146.2 TH/s last December. This means that more miners were dedicating their systems to mining Litecoin, thereby increasing the supply of its coins for trading in the market.

How Will Litecoin Halving Affect Investors and Miners?

The current change in Litecoin’s mining supply will affect their profitability as cryptocurrency mining has certain fixed and non-negotiable costs, such as electricity supply and data center costs. But Coindesk states the miner defection may be a temporary phenomenon. “The computing power, however, may tick higher over the coming months, as the drop in the inflation rate to 4 percent from the current 8.4 percent per year will likely bode well for LTC’s price. That would compensate for the slide in the mining profitability,” the publication writes. Messari Crypto’s director of research Eric Turner told Bloomberg that investors had already priced in the halving event while putting their funds into the coin. According to him, the halving event may not turn out to be the “positive catalyst” that many crypto investors expect.