Litecoin block reward halving was successful, with a 24-hour increase of more than 13%. Is the bull market engine starting again?

Litecoin (LTC), currently the fifth largest cryptocurrency by market cap, has just undergone its second block reward halving as designed by its code.

The Litecoin blockchain reached block height 1,680,000 at 10:16 UTC on Monday, mined by Poolin. According to the design goal of the Litecoin network, the network reduces the mining reward by half every 840,000 blocks (approximately every four years).

The Litecoin explorer of mining pool operator BTC.com shows that at block height 1680,001, generated at 10:18 UTC and broadcast by the Antpool mining pool, the mining reward was effectively reduced from 25 LTC to 12.5 LTC, indicating that inflation is now at a lower level.

The block production time on the Litecoin network is approximately one block every 2.5 minutes, approximately 576 blocks are produced every 24 hours, and a new supply of 7,200 LTC enters the market every day, which is half of the previous daily supply of 14,400 LTC.

As of press time, about 63 million of Litecoin’s total supply of 84 million LTC have been mined and are currently in circulation, leaving about 21 million LTC block rewards — worth $2 billion at today’s prices — for mining companies to compete for in the future.

Since the beginning of this year, the price of LTC has risen sharply from around $30 in January to around $120 in June, but has since fallen to around $100. Influenced by factors such as the Litecoin halving today and the general rise of mainstream currencies such as Bitcoin, as of press time, LTC has broken through $100 today to $104, with a 24-hour increase of more than 13%.

According to data, the Litecoin network’s hashrate and mining difficulty have both jumped 200% since the end of December 2019, which is consistent with the expected price increase before the “halving” event.

Since some widely used Litecoin mining equipment now struggles to generate enough LTC to offset electricity costs, this halving may affect people's interest in participating in LTC mining.

According to a mining profit index from F2Fool, before August 5, the three most profitable LTC mining machines produced by InnoSilicon and Fusionsilicon X6 had profit margins between 55% and 60%.

However, other older models such as Bitmain’s AntMiner L3 have a profitability of less than 50%, which is calculated based on the electricity cost of $0.04 per kilowatt-hour and the price of LTC before the halving.