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Apr 16
2019
Binance Research Analyzes Halving Scenarios for Litecoin, Possible Bitcoin Parallels

Binance Research, the market analysis arm of global cryptocurrency exchange, Binance, has released a report on the potential implications of Litecoin’s plans to decrease its block rewards by half on August 6, 2019, drawing from a comprehensive analysis of previous halving events by Litecoin and Bitcoin.

Binance Research’s report, titled “Litecoin’s 2019 Halving Scenarios,” identifies four potential scenarios that may emerge after Litecoin’s halving of block mining rewards, and what each scenario might mean to Litecoin’s price, as well as Bitcoin’s, moving forward.

The four potential scenarios projected in the report are:
- A
price rally that pushes mining profitability (measured in fiat terms) to levels approaching its pre-halving long-term average.

- An increasing hashrate in the months prior to the halving.

- A self-adjustment mechanism where price doesn’t rally, leading to miners exiting the market, resulting in lower block difficulty, which ultimately leads to higher (recovered) profitability.

- A permanent drop in the mining profitability of Litecoin.

The report also analyzes the history of halvings on both Litecoin and Bitcoin, to provide further context and precedent to the upcoming halving for Litecoin.

“Litecoin’s previous halving was preceded by a large price rally with an increase by more than 200%” Binance Research noted in the report. “Regarding Bitcoin, its past two halvings ultimately led to lower mining profitability.”

Read the full report here.

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About Binance Research

Binance Research provides professional, data-driven insights and analysis for investors in the crypto space to increase the level of transparency and improve the quality of information within the current crypto ecosystem. The team consists of professionals with a background and experiences in blockchain engineering, investment banking, strategy consulting, academic research and data science. For more information, visit: https://research.binance.com/