Is Litecoin a Good Investment?

Litecoin was created as a derivative of Bitcoin and is designed for faster, more affordable transactions. Find out in this article if Litecoin is worth investing in!

The article covers the following subjects:

History of Litecoin (LTC)

Litecoin is the largest cryptocurrency in terms of market capitalization, and can be found on nearly every crypto exchange. Litecoin is currently widely used to purchase goods and services, as well as invest in other cryptocurrencies.

A former Google employee realized there were some innovations that could be made to Bitcoin to make it more useful. He first noted that if transactions took less time and fees, then Litecoin might catch on more quickly.

Impressively, Litecoin has gone from a market cap of $1 billion to over $360 billion in just 2 years. It continues to dominate the market today, and is worth 8 times as much as it was a year ago.

Charlie Lee, the founder of Litecoin, decided to sell his LTC holdings in December because he had concerns over his growing influence on the platform. He claimed that people thought it was a conflict of interest for him to hold Litecoin when tweeting about it, due to his influence as LTC’s founder.

How Litecoin Is Different

Litecoin is different from other currencies in a few ways.

Litecoin uses the Scrypt software algorithm to mine units. This prevents people from creating custom computers specifically made to mine Litecoin.

LTC is the fastest digital currency and has a transaction time of 2.5 minutes, whereas Bitcoin takes 10 minutes.

Also, Bitcoin is more costly than Ethereum and Litecoin, which cost approximately $2,500 and $40 respectively.

Litecoin Fundamental Analysis

The Litecoin market is still experiencing growth, likely as a result of people testing it before moving on to Bitcoin. There is less supply, making Litecoin valuable.

Litecoin is an unchanged, low-consistency cryptocurrency with a transaction rate as of late 2021 that has since fallen in comparison to past years. Though it shows potential and will likely rise again, Litecoin’s value has been fairly stagnant since it crashed at the beginning of 2022; however, recent developments show a promising future for the coin.

Litecoin has had its own share of problems, but it’s still being utilized by thousands of people.

Litecoin Technical Analysis

Litecoin technical analysis looks like any other cryptocurrency. Finding a bottom is often arduous, so you will need to be cautious about “jumping all in” into the Litecoin market. Luckily, we have significant history near the $20 level showing market interest, so that might be an area where Litecoin attracts a lot of inflow.

Leverage can be used to make money when a price goes up or down, for example with the CFD market. Short-term trading may be difficult due to Litecoin’s extreme move in price during the bear market, but there is still potential for it to fall further.

Litecoin Sentiment Analysis

The trends for cryptocurrencies haven’t been favorable in recent years. Generating positive sentiment will make plenty of money when the economy “bottoms out.” Keeping your eyes open for dips and an opportunity to invest is helpful.

Besides Bitcoin, you should watch the US Dollar Index. When risk appetite is poor, the US Dollar can strengthen. Litecoin follows Bitcoin and tends to rally with it when Bitcoin starts to rally.

The Federal Reserve and other major central banks help determine the trend in market emotions. If the Federal Reserve begins to tighten again, money will flow back out of the stock and cryptocurrency markets into commodities and fiat currencies.

You can look at social media activity to measure the popularity of a certain item. The more popular an item is, the higher it is on the list, but you should also keep in mind that it could be lower if people have lower interest in it (for example, if average retail traders have no interest in a particular product).

You can use this principle of analysis when predicting the price of LTC. 

 

Why Should I invest In Litecoin?

There are several benefits to investing in cryptocurrency. Many people who invest in cryptocurrency have become millionaires thanks to their ventures into crypto investments. To be safe, you should diversify your crypto investments.

There are so many digital currencies now besides Bitcoin and Ethereum. Most investors are unaware of the many altcoins (alternative coins) they can add to their portfolios.

If you are looking to invest in a cryptocurrency, Litecoin is an option. It may not be as popular as Bitcoin or Ethereum, but it is worth considering.

Litecoin is faster than Bitcoin

Transactions on the blockchain occur in two different ways. One way is peer-to-peer, without a third party. The other way is with intermediaries like banks. Bitcoin uses the first method, which makes it popular; however, transactions are slow and expensive. Developers created new coins that use the second method instead of peer-to-peer transactions, and thus are cheaper and faster.

Litecoin is among a number of coins that have increased the speed of transactions. Its transactions are four times faster than transactions on Bitcoin, and it shows some promising technological developments. A project that keeps innovating is a good investment. 

Litecoin has a big market capitalization

Market cap is the total value of a particular commodity at one point in time. For digital currencies, they calculate this by multiplying the number of coins circulating by the current price. Litecoin is currently trading at $52, with 69.3 million coins. That’s a market cap of $5 billion, and still ranks 20th among cryptocurrencies.

The high market cap of this currency gives it a cushioned stability, which makes it immune to sudden drops and protects it against manipulation by a few whales.

Litecoin is highly liquid

Check the liquidity of a coin to ensure it will be easy to sell. A more liquid coin allows more flexibility, which is valuable for short-term trades. Litecoin is one of the most liquid coins in the digital market. Litecoin’s 24-hour volume recently was more than 7.8 million coins, worth more than $1.1 billion. This can help measure liquidity; with 100,000 units moved in just 24 hours, you can see its popularity.

Litecoin has a strong team of developers

There are many coins in the digital currency industry today. Many are temporary pump-and-dump schemes, so be careful when investing. A good development team means that the coin is a serious project with future prospects and that it will adapt well to technological advancements to stay competitive.

Litecoin is worth investing in because it may be ”large and valuable” in the future. The team is led by Charlie Lee, a former Google engineer who also worked at Coinbase. He has stayed on course with developing Litecoin to become faster than Bitcoin, and has shown support for SegWit and Lightning Network.

Large corporations are using Litecoin

Large corporations who accept a digital coin identify with it and draw investors to it. The more they buy, the higher its value climbs as demand increases. Litecoin is accepted by a variety of companies, and its acceptance has driven the growth of Litecoin. Blockchain technology can change the gaming industry, and LTC is an integral part of that future. It would be wise to invest in Litecoin now, as it will likely increase in value as it gains widespread support.

What Are the Potential Risks of investing in Litecoin?

Investing in cryptocurrency may be risky. This is due to the volatility of the market, but many investors report successful outcomes if they play their cards right. 

If you plan on investing in cryptocurrency, make sure you decide if it’s the right thing to do for your financial goals. You have to be the one who decides to take on these risks, and only you can decide if you are willing to invest in Litecoin.

Competing altcoins that offer similar benefits

Litecoin was the first to appear on the market and among the first altcoins available. Some other cryptocurrencies offer lower prices and even faster transaction speeds.

Less security

Bitcoin is the most decentralized cryptocurrency and the most resilient to a 51% attack. Litecoin has similar characteristics, so the level of security is approximately equal to the main crypto in the world. You probably won’t find a revolution in anonymity here, but you can be sure that your data is protected. 

Shaky faith in leadership

Litecoin’s founder Charles Lee believed that the coin could be successful. However, he has sold all of his stake in the project, citing a conflict of interest. Coupled with the lack of faith from his leadership team, this raises questions about why people should invest in Litecoin now.

Ways to invest in Litecoin

You can invest in Litecoin by buying it with a few clicks from an online platform or exchange. However, this is not the only way to invest in this cryptocurrency. Let’s take a look at all the ways to make money from such a promising coin as LTC.

Buy and Hold

Buying and holding cryptocurrency is the easiest and least complicated option for crypto investment, with the least amount of risk. If you buy a cryptocurrency on a spot exchange and then store it in your digital or hardware wallet, you’ll be risking what you pay for the cryptocurrency overall.

You can make money with coin investing, but it comes with ups and downs. For example, Litecoin rose and fell drastically in two years. You need to be prepared to lose a lot of money if you’re not willing to keep an eye on your investment.

Trade

Investing in assets can be a long and hard process, whereas investing in trade methods is a quick way to get an asset. There are two types of trade methods: spot and derivatives trading.

Spot trading is when a trader buys an asset at a low price and sells it when the price rises. Sometimes it’s wisest to cash out when the market gets negative. For example, if you buy Litecoin at $20 and sell it at $140, you will have $120 in profit. It would be different if Litecoin fell back to the $20 range, and you could have just bought it back with only $100 to spare.

A derivative can be considered an alternative to spot trading. It allows the trader to go both long and short on an asset, but without reducing their losses. This gives traders more control over the outcome of a trade and for some, it also amplifies their gains. There are many advantages of using derivatives, but they still come with a higher risk than other investments.

Is Litecoin a Good Long-Term Investment?

Litecoin is a good long-term investment because it has a lot of potential. It is a new cryptocurrency that is similar to Bitcoin, but with some important differences. For one, Litecoin is faster and cheaper to make transactions. This makes it more attractive for businesses to use. Additionally, LTC has a larger supply than Bitcoin, which means that there is more potential for growth. While Litecoin is not as well-known as Bitcoin, it has a lot of potential to become a major player in the cryptocurrency world.

Conclusion

If you’re looking for a good investment, Litecoin is definitely worth considering. It’s become a lot more popular in recent years and has a lot of potential for growth. It’s also relatively affordable, which makes it a good option for people who are new to investing. So if you’re thinking about putting some money into cryptocurrency, Litecoin is certainly worth checking out.

Investing in Litecoin FAQs

Price chart of LTCUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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