Litecoin [LTC] And other major cryptocurrencies have been overshadowed by Ethereum [ETH] Merge in the last few weeks. Interestingly, LTC may have already benefited from the merger from a retail perspective.
An examination of Litecoin’s hash rate reveals a sharp rise in the first ten days of September. Its hash rate grew from 390.93 TH/S on August 31 and peaked at 527 TH/S on September 9.
The timing of Litecoin’s hash rate surge coincides with the miner’s exit from Ethereum. Some miners may flock to LTC miners during this time, which means a sudden increase in the hash rate.
Miner profitability vs price action
Although the increase in hashrate represented an influx of miners, it was not related to the merger. However, the hash rate may have been affected by LTC’s price action. When considering Litecoin’s hash rate, especially over the past six months, one can see that its volatility has been in tandem with the price action of LTC.
LTC hash rate dropped sharply in June from its 2022 peak of over 512 TH/S to as low as 353.75 TH/S on July 1. This was around the same time that the cryptocurrency market crashed. The decline in miners’ profitability may have been the driving force behind the crash.
The land collapse in April and June may have also driven prices down to the point that many miners are out of profit. Therefore, it made sense for miners to stop their operations if their costs outweighed their profits from mining.
In addition, Litecoin’s hashing has gradually recovered over the past three months as the cryptocurrency price has also seen some recovery.
Litecoin’s hash rate has also fallen sharply in the past five days. This was consistent with the decline in LTC’s price since this period, but the 10% drop is hardly enough to justify a significant change in the hash rate. The only way such a result would make sense is if the increasing number of miners led to more sensitivity to price changes. Reducing transaction volumes may also reduce miner profitability.
In addition to the above data, the volume of LTC transactions has decreased ominously over the past five days. At the same time, the price recorded a decline.
The opposite result as the volume was high will support more profitability for miners even with a slight increase in the number of miners. Thus, higher LTC prices will increase the profitability of miners.