Litecoin [LTC] and different high cryptocurrencies have been overshadowed by the Ethereum [ETH] Merge for the previous couple of weeks. Apparently, LTC might have really benefited from the Merge from a hashrate perspective.
An inspection of Litecoin’s hash price reveals a pointy uptick within the first 10 days of September. Its hash price grew from as little as 390.93 TH/S on 31 August and peaked at 527 TH/S on 9 September.
Supply: Coinwarz
The timing of Litecoin’s hash price spike aligns with the miner exodus from Ethereum. A number of the miners might have flowed into LTC miner swimming pools throughout this time, thus the sudden hash price increase.
Miner profitability vs worth motion
Though the rise in hashrate represented an influx of miners, it wasn’t linked to the Merge. Nevertheless, the hashrate might have been influenced by LTC’s worth motion. Upon contemplating Litecoin’s hashrate particularly within the final six months, it may be seen that its fluctuations had been in tandem with LTC’s worth motion.
Supply: Coinwarz
LTC’s hash price tanked sharply in June from its 2022 peak above 512 TH/S to as little as 353.75 TH/S by 1 July. This was across the identical time that the crypto market witnessed a crash. A drop in miner profitability might need been the driving power behind the crash.
The April-June market crash might have additionally pushed costs so low that many miners had been out of revenue. Thus, it made sense for miners to halt operations if their prices outweighed their mining income.
Moreover, Litecoin’s hashrate progressively recovered within the final three months as crypto costs additionally loved some restoration.
Hash price sensitivity
Litecoin’s hashrate additionally registered a pointy drop within the final 5 days. This aligned with LTC’s worth drop since this era however a ten% drop is hardly sufficient to warrant a serious hashrate change. The one method such an consequence is smart is that if an elevated miner depend resulted in additional sensitivity to cost modifications. Shrinking transaction volumes would additionally end in decrease miner profitability.
Supply: Santiment
Along with the info talked about above, LTC’s transaction quantity dropped ominously within the final 5 days. The identical time that the worth registered a pullback.
An reverse consequence the place buying and selling quantity was excessive would assist extra miner profitability even with a slight improve within the variety of miners. Increased LTC costs would thus increase miner profitability.
