Bitcoin (BTC) is currently almost a year away from its next block reward halving, but Litecoin (LTC) miners are already preparing for the impact. In less than two weeks, Litecoin’s block subsidy will decrease from 12.5 LTC to 6.25 LTC per block.
Despite its fair share of controversy, Litecoin remains the 12th-largest cryptocurrency by market cap, valued at around $6.8 billion. Its miners currently earn around 7,200 LTC in block rewards daily, equivalent to approximately $670,000.
As the halving approaches, major investors, also known as “whales,” are taking advantage of what they perceive as an opportune trade. Traders have noted that whales have purchased nearly $60 million worth of LTC in the past two days. This surge in buying activity indicates that these investors are preparing for potential price increases in anticipation of the halving.
However, while Litecoin’s value is on the rise, its performance against Bitcoin (BTC) remains weak. Litecoin currently trades near all-time lows against Bitcoin, indicating a trend that has persisted throughout the years, regardless of previous halvings. As of July 19, LTC/BTC trades at 0.0031, with its all-time low of 0.0017 occurring in June 2022. In comparison, at one point, 1 LTC was worth as much as 0.052 BTC, equivalent to $1,560 today.
Similarly, Litecoin’s value against the US dollar has also declined over time. While its all-time high was in May 2021, when it traded at over $400 per token, it now stands at a more modest $93.
It is important to note that Litecoin’s weakness against Bitcoin is not unique. Bitcoin forks, such as Bitcoin Cash (BCH) and Bitcoin SV (BSV), have also experienced significant declines when compared to Bitcoin itself. Bitcoin Cash, for example, saw all-time lows in BTC last month and currently trades at just 0.00817 BTC, which is 98% below its all-time high.
Bitcoin SV’s situation is even worse, with a bounce from record lows in June already stalling. Currently, BSV/BTC trades at 0.00124 BTC, which is also 98% below its all-time high.
This comparison between Bitcoin forks and Bitcoin itself emphasizes the challenges faced by alternative cryptocurrencies when competing against the dominant market network. Bitcoin’s network effect and established position as the leading cryptocurrency make it difficult for others to maintain their value and market share.
In conclusion, while Litecoin miners and investors prepare for the upcoming halving, its performance against Bitcoin remains weak. This trend is not unique to Litecoin, as other Bitcoin forks, such as Bitcoin Cash and Bitcoin SV, have also struggled to maintain their value compared to Bitcoin. The market’s preference for Bitcoin as the leading cryptocurrency highlights the challenges faced by alternative digital assets in establishing themselves as viable long-term investments.