In about five days, Litecoin will suffer a reduction in the block reward. The mining reward is currently set at 25 litecoin ($ 2,500) per block and will decrease to 12.5 litecoin ($ 1,200) per block on August 5th.
With this transition, the protocol will add significantly fewer cryptocurrencies to the market in the coming period.
The halving of the reward is similar to interest rate increases and other measures initiated by central banks around the globe to combat inflation.
The price evolution is usually influenced by this event, and in the last six months Litecoin has illustrated this.
225% increase this year
Litecoin was trading at $ 30 on January 1, 2019 and ended the first quarter at $ 61, representing a 100% gain. This was the best performance recorded in a LTC quarter.
It is noteworthy that LTC managed to outperform Bitcoin performance this year. By the end of July, Litecoin increased by 225%, while BTC increased by 167%.
The other values of cryptocurrency have also increased since mid-December. They have hit new records several times in the last two months. For example, the network hash rate increased to 523.81 TH / s on July 14, up 258% from the minimum value of 146.21 TH / s in December 2018, according to bitinfocharts.
Half reward reduction
Mining profitability will likely fall by 50 percent along with the rewards of the block, as the difficulty is rarely adjusted immediately. Therefore, some miners may move to other blockchains, leading to a decrease in the hash rate.
Litecoin is currently trading at around $ 100.