Litecoin: All you need to know before You buy LTC; Subsequently, several altcoins followed in Bitcoin’s footsteps, trying to build on or improve upon the goals of the first cryptocurrency. Others are more of a complement to Bitcoin, alongside the main digital asset and silver and gold.
Litecoin is generally digital silver, as Bitcoin is digital gold. However, it shares many similar properties with Bitcoin and is one of the oldest crypto-assets in the top ten cryptocurrencies by market cap. This alone gives Litecoin incredible prospects as an investment and huge staying power in the fast-moving cryptocurrency market.
Litecoin is four times faster than Bitcoin. But does it make it a good investment?
Litecoin (LTC) competes with Silver (BTC) Gold. Digital currencies were launched in 2011 as a faster and cheaper alternative to crypto giants.
If you are thinking of buying Litecoin, you should know a few things.
1 – Litecoin is lighter and faster than Bitcoin
Litecoin is a digital currency that follows in the footsteps of Bitcoin. Bitcoin is the world’s first decentralized digital currency, allowing people to pay without the intervention of banks or governments. However, this grandfather of crypto is not perfect: Bitcoin transactions can be slow and energy-intensive.
Litecoin aims to solve these problems. It uses the same blockchain technology but processes transactions four times faster, making it more attractive to retailers. Furthermore, there will eventually be four times more Litecoins available than Bitcoins. There will only be 21 million Bitcoins, compared to 84 million Litecoins. Some argue that this makes it better for small transactions.
2 – Litecoin founder sold his coins to avoid a conflict of interest
After founding former Google software engineer Charlie Lee Litecoin, he has become an influencer in the cryptocurrency space. This is in line with its mission to encourage the adoption of digital currencies, in particular Litecoin. However, it also led to allegations of conflict of interest.
So, when Lee promoted Litecoin on social media, people said he just wanted to increase the price. Finally, he got to the point where he had to choose between mining Litecoin and owning Litecoin. In 2017, he sold all his tokens and donated the proceeds to the Litecoin Foundation.
It is worth noting that Lee Jae-yong has also been criticized for short selling. However, after this year’s rollercoaster of Musk’s effect, cryptocurrency investors should thank thoughtful and responsible influencers.
3 – Govcoins may be on the horizon
Anyone considering buying cryptocurrencies in the digital payments space needs to be aware of the development of the so-called “go coin.” More than 60 countries are considering launching their state-run digital currencies. The Bahamas, Cambodia, and China have come a long way.
Authorities are looking for ways to turn things around amid concerns that the rise of cryptocurrencies could make it harder for them to control their savings. These coins will benefit from some of the advantages of blockchain – fast, cheap, and secure transactions. But they will be pooled, so governments and central banks will continue to support them.
One of the challenges facing Bitcoin and Litecoin (LTC) in getting businesses to use them as currencies is that their value can fluctuate significantly. This makes it difficult for businesses to manage their salaries and supply chains. Government coins and stable coins (cryptocurrencies pegged to the U.S. dollar or the price of gold) solve this problem.
The growth of go coins and stable coins could have a huge impact on digital currencies like Litecoin. Govcoins can drive more merchants and buyers to adopt digital payments. But they can also drive decentralized coins out of the market, especially if governments introduce stricter cryptocurrency regulations at the same time.
4 – Litecoin is widely available
So, litecoin has been around for 10 years and is considered one of the most established cryptocurrencies. Therefore, it is available from most major crypto exchanges.
However, it has not seen the dramatic price jumps of Bitcoin or Ethereum (ETH). For example, if you had bought $1,000 worth of Litecoin (LTC) three years ago, you would have around $1,540 today – a 54% increase. That’s a solid return, especially when some coins have dropped completely. However, Bitcoin has jumped over 500% over the same period.
If you want to buy be prepared for volatility. It’s not a good idea to invest money that you can’t afford to lose, as all cryptocurrencies can have huge profits and significant losses.
So, as mentioned above, there are many players in digital payments, so you need to consider cryptocurrencies and other non-crypto competitors. So, the Litecoin team has done a lot to promote and grow the crypto industry, but that does not guarantee success. New coins-or even coins that can overtake Litecoin will go.
Why are investors choosing Litecoin?
Litecoin’s platform has transactions times four times faster than Bitcoin’s. They are also much cheaper – 2.6 cents versus about $4.38 for Bitcoin, according to InvestorPlace.
Also, in 2017, bitcoin was the first cryptocurrency to complete a Lightning Network transaction. And the test transaction took less than a second to complete.
The strategy behind choosing Litecoin
So, as cryptocurrency grows in popularity and usage, more new companies appear on the market. There are over 19,000 cryptocurrencies available today. While competition has reduced litecoin’s market share from the top 10 to number 18, litecoin (LTC) has the longevity that some of the hottest coins lack.
Litecoin has a much larger supply than Bitcoin. So, it has a hard cap of 84 million LTC. Furthermore, the Litecoin network generates new blocks in two and a half minutes, compared to ten minutes for creating blocks with Bitcoin. These factors make more attractive for cryptocurrency transactions, with bitcoin primarily functioning as a store of value.
Litecoin Pros and Cons
Investing in Litecoin has been incredibly lucrative for early cryptocurrency investors, and several signs point to a repeat of the asset’s energy crash. If another 10,000% rally takes place, investing in Litecoin now would be life-changing.
Pros
- Transactions are confirmed much faster than Bitcoin.
- Lower fees than other cryptocurrencies.
- It has a long-standing reputation in the top 10 of the cryptocurrency market.
- Explosive returns are possible during uptrends.
Cons
- The sale of the founder’s assets tarnished the reputation of early investors.
- Recent sentiment has become a bit bearish.
- Asset halving does not have the same impact as Bitcoin.
How much to invest in Litecoin?
The cost of each Litecoin is just under $ 225 per LTC token, so it’s ideal to start here. However, each is divisible by eight decimal places, so you can invest in a smaller portion of Litecoin and buy it in equivalent fiat increments.
So, the more money you invest, the higher your potential returns. However, it is important to remember that you will never retreat more than you can comfortably lose. And with how volatile cryptocurrency is, any loss will be a lot less comfortable than you might think. But the profits are also shocking, making altcoins worth the risk.
Ways to Invest in Litecoin
Like other crypto assets, investing in Litecoin can be done by mining or buying LTC online with a few clicks on a cryptocurrency platform or exchange. Once you own Litecoin, you can choose different ways to invest in cryptocurrency. Below are some of the most common Litecoin investment strategies.
Buy and keep
Buying and holding cryptocurrencies like Litecoin and other altcoins require first purchasing the asset on a cash exchange and then transferring it to a web wallet or hardware wallet for future safekeeping.
This type of investment requires minimal skill or effort but leaves potential gains. For example, Litecoin went from under $20 to $160 in 2019. In 2020, it fell below $40. Those who buy and hold will miss out on a major profit opportunity. It is now back to around $225 per coin.
Negotiation
Instead of buying and holding an asset, investors can become traders and try to profit from price fluctuations. Here are the two main trading methods.
Spot trading: Spot trading involves buying an asset at a low and selling an asset at a high to extract the maximum profit from each swing. However, when markets are falling, the only option is to switch to cash as asset prices drop. There is no way to make money when markets fall using spot platforms.
Traders who bought Litecoin for less than $20 and sold it at $140 would have made $120 in profit, and when Litecoin dropped to the $20 range, they could have bought Litecoin back and still have almost $100 in profit. 100 to spare.
Derivatives Trading: Derivatives trading is an alternative to spot trading that allows traders to buy or sell short in the market, so profits are possible regardless of trends. CFDs that allow leverage can make Litecoin long or short even more profitable, amplifying returns. This also increases risk, so make sure you trust risk management strategies.
On derivative platforms like PrimeXBT, Litecoin surged from $ 20 to $ 140 and from $ 140 to $ 20, so traders should have benefited from both. With 100x leverage, two price volatility and $ 120 volatility could result in a profit of up to $ 24,000. Today, Litecoin is back at over $ 200.
Conclusion
Litecoin can be a wise investment option for long-term investors due to its long track record and solid ability to survive periods of high volatility. If you like taking risks, your investment can be rewarded in the future. However, the Litecoin platform is less innovative than competing blockchains, which may outperform Litecoin over time.
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