Trends Of Halving
Now that we have had a few coins halve in the past we can start to see trends about what happens before a coin halves, during and after, lets dive into it.
Price rally - Prices spike months before the halving takes place. For example litecoin who is coming up on a halving is up 200% YTD!
Hashrate increase - with the expected bump in price comes more hash rate which tends to speed up block production until it normalizes. This actually speeds up the date in which the halving will occur as blocks are mined a bit faster then their normal levels till the correction takes place.
- The halving process is quick at least for litecoin it will only take about 5-10 minutes for the halving to kick in. In effect mining will most likely fall a bit however the ramp up in demand tends to offset this as less coins are produced. This can actually lead to more miners coming in for the lesser reward blocks as the price sustainability is still there. This can also come with higher transactions on exchanges etc. Which includes more fees for the miners during this time period.
Price normally remains high from the before rally and tends to not sell off because of the massive reduction in new coins. For example Litecoin currently produces 14,400 new coins a day but will reduce to 7,200 per day after the halving takes place. This is a total value of roughly $561,600 a day. So you can see how half a million dollar value applied to fewer coins should linger into a increased price rally even after the halving takes place.
Things will be interesting as we move into the final days of litecoin halving and it will be fun to watch the trends.