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Litecoin Investors Guide: Everything You Need To Know

What is Litecoin?

Litecoin is an altcoin created by Charlie Lee in October 2011. Based on the open-source code of Bitcoin, it has a structure similar to Bitcoin.

Litecoin Investors Guide

investing in Litecoin

Litecoin (LTC) is Bitcoins silver. It has a fixed supply of only 84 million coins.

It is a peer-to-peer cryptocurrency developed for a global payment network and is fully decentralized. The crypto can generate 84 million crypto coins and has a faster transaction speed. It uses simple mining methods.

The cryptocurrency helps to make payments to people across the globe without an intermediary to process the transactions. Speedy processing and low transaction costs are its chief features.

trading Litecoin

History of Litecoin

Litecoin ranks among the top 20 cryptocurrencies in terms of market capitalization. The block generation time is just 2.5 minutes, faster than Bitcoin, which takes 10 minutes. The decentralized crypto can encrypt from any central authority.

Its protocol works on open-source encryption. It does not require any intermediary regulators like a bank or a payment processing service. The cryptocurrency has a high acceptance rate as it has confidential transactions (CL). It prevents scalability and is not replaceable.

litecoin cryptocurrency

  • Easy accessibility and faster transaction speed are the chief features that attract investors.
  • The cryptocurrency uses Proof of Work (PoW) to add blocks. Miners use a hash algorithm to solve tough math problems to reach a consensus and receive block rewards.
  • LTC is made accessible by its Scrypt hashing algorithm. It is similar to Bitcoin but is different in terms of its hash algorithm.
  • The crypto adopted SegWit (Segregated Witness) in 2017
  • It uses Lightning Network to enable faster transactions and is a solution to Bitcoin scalability.
  • Currently, the MImbleWimble privacy protocol for confidential transactions is a development process that is going on.
  • It uses scrypto algorithm ASIC and FPGA that is complex and expensive.
  • It performs transactions at a very fast speed, four times faster than that of Bitcoin.

Litecoin Live Price

As of October 2021, it is the 17th largest crypto in market capitalization.

  • While Bitcoin trades for more than $63,000, the price of LTC is just around $260.
  • Low transaction fees and speedy transactions make the digital asset the best investment.
  • However, it requires more investor interest to zoom higher. Further, its maximum limit is 84 million coins.

 (chart)

What Makes Litecoin Price Move

With Bitcoin activity rising higher, Litecoin activity, also known as Bitcoin silver, is increasing.

  • There is a strong correlation between Bitcoin and Litecoin which is an advantage for LTC.
  • The crypto helps in making faster payment that is cheaper and faster. Micropayments like paying for a cup of coffee are possible. It is a reliable altcoin.
  • Coinbase, the most used cryptocurrency brokerage, supports LTC. It attracts more than one million new users who prefer digital crypto for its low fee and faster transactions.
  • Charlie Lee, the crypt’s creator, appears on The Glenn Beck Program and the Squawk Alley on CNBC, which gives the crypto greater exposure.

Litecoin Price Falling

  • Litecoin takes approximately 2.5 minutes as the processing time for a transaction, but due to network congestion, it takes almost 30 minutes per block, and users prefer the larger Bitcoin.
  • Only 84 million is its mining capacity, and scarcity is its drawback.
  • Higher capital gains in the US are a cause of concern to cryptocurrency users as they are taxed heavily.

Litecoin Price Rising

Litecoin is a lighter version of Bitcoin. It handles transactions faster and is a cheaper alternative for making payments. It is a better alternative to fiat money. Adoption of LTC is cheaper and easier. If you have the wallet app installed on your smartphone, you can start transactions immediately. It uses blockchain technology, which helps in the transfer of funds easily between businesses and individuals.

  • A mall in Singapore has an ATM that accepts cryptocurrencies like Bitcoin and Litecoin.
  • Venezuela uses it as a mainstream payment system for international transactions.
  • Robinhood is a free trading platform that helps users buy and trade BTC, LTC, ETH, and other cryptocurrencies. If you are an account holder, you can use the Robinhood cryptocurrency app for trading crypto, gold, and stocks via its mobile app. Your crypto on the best crypto trading app like Robinhood will remain safe and secure.

Ways to Invest in Litecoin

If you are looking to invest in Litecoin (LTC), just follow a few simple steps. The best way to buy crypto is through a crypto exchange. The Gemini crypto exchange and Coinbase are some top crypto exchanges on which you can buy it.

  • Choose a regulated online broker like eToro.
  • Provide information about yourself along with contact details.
  • Select a strong password and username.
  • Get your account verified by uploading ID proof.
  • Deposit funds using a debit or credit card or e-wallet and buy the digital asset.
  • Confirm the investment.
  • The best US crypto exchanges that users prefer are Coinbase, SoFi, and Robinhood crypto. They allow users access to multiple markets. You can respond instantly to market trends and reap profits from the price swings.
  • On TD Ameritrade crypto, you cannot buy cryptocurrencies. But you can open an account at Webull crypto, where there are many crypto currencies to trade.
Related:  A Beginners Step by Step Guide to Cryptocurrency Trading

How To Open A Litecoin Wallet

Choose the best type of wallet according to your needs. There are mobile wallets, hardware wallets, and software wallets.

Go to the iOS app store or Google Play. Download the app. Open the app and provide a recovery sentence with 24 words, which is the backup of your wallet. Set a strong password and add the digital asset to your wallet.

If you are a newbie to cryptocurrency, you can use a hardware wallet to store your LTC crypto. Wallets keep digital assets safe and secure.

You can choose Ledger Nano X hardware wallet, which is easily connected via Bluetooth to any iOS device and a USB to connect to your computer.

  • Trezor is almost like the Nano X. The hardware wallet has a screen for extra safety.
  • Jazz Liberty is a user-friendly wallet. Store your private key safely. It supports more than 85 coins, including LTC. You can download the app for free.
  • For beginners, Exodus is the best wallet as it is free. Users can get customer support.
  • Mycelium offers cloud storage and cold storage. It gives users more control over their transaction fees.

Litecoin Funds

Grayscale Litecoin Trust invested in LTC, by which investors gain exposure to the crypto.

Like other cryptocurrencies, LTC token creation is through mining. Miners get rewarded with LTC tokens while mining. By Litecoin halving, the rewards that miners get for a block are halved.

Best Performing Litecoin Funds

Litecoin ranks among the top 20 cryptocurrencies by market capitalization. With an increase in adoption and usage, its value may grow higher. Users, traders, and institutions can purchase things and transfer funds between accounts.

Biggest Litecoin Funds

Choose the best crypto platforms that are safe to invest in Litecoin.

  • eToro is a regulated platform with over 20million investors. You can buy and sell crypto with ease.
  • Coinbase is a very easy-to-use platform that will suit new investors. Just go through the KYC process, provide your ID copy and a selfie.
  • On the Binance cryptocurrency exchange, you gain access to heaps of cryptocurrencies, including LTC. You can invest using your debit/credit card at a 0.5% fee in the US.
  • Binance is a high-performance exchange that charges minimal fees. Users can make use of the best app to buy cryptocurrency that has a friendly app interface.

Best Litecoin Trading News Sources

Crypto traders keep in constant touch with the latest crypto news. There are many options to get live price updates. As it is a competitive sector, new traders use the internet to update themselves on the latest news. You can choose trading platforms like Binance, Coinbase, Robinhood, Kraken, and Gemini.

Is Litecoin A Good Investment (chart and summary)

In terms of speed and inexpensive borderless transfer of payment, it is a great investment opportunity.

Litecoin price movement

  • The LTC cost was at $3 per altcoin in September 2017.
  • It zoomed to $366.90 in December 2017.
  • In 2018, it gradually declined to $28.50 levels.
  • The crypto surged to $145.50 levels in 2019.
  • In 2020, it was trading below $100.
  • In 2021, the crypto surged to life-highs at $379.50 in May 2021 and slipped to 110.35 in July. In November 2021, it is trading at $250.
  • It has been going up and down through various bubble cycles.

Is Litecoin A Good Investment

Is Litecoin A Genuine Investment?

Though LTC is an improvement on Bitcoin technology, it is quite a risky investment. It has an aging infrastructure and is not competitive in the crypto world. There are newer altcoins that offer the same features and are efficient.

Charles Lee, its founder, has sold his stake in the crypto, which hampers investor confidence. It has a simple layout that provides ease of use.

Though you cannot think of Litecoin for long-term investment, users who prefer to trade on price swings can invest in it for the short-term.

Litecoin Links With The Dark Web

Litecoin has become one of the top cryptocurrencies used in the dark web. Almost 30% of vendors use this digital crypto for this purpose. Users are not pleased about its association with the dark web.

Bitcoin prices are soaring higher. Hence, the darknet world prefers smaller crypto altcoins, whose prices are lower, for their usage.

The crypto market is a risky and speculative sector for investors.

Trading Litecoin

For trading crypto Litecoin, you have to open an account and develop a trading plan. Do the research, and use technical analysis for trading crypto. There is a range of indicators available on the crypto platforms. You can identify the market trend to plan your strategy accordingly.

Related:  10 Cryptocurrency Terms and Definitions You Need to Know

Choose top cryptocurrency exchanges that provide professional-level tools to users. They provide advanced charting features, auctions, block trading, and multiple order types. The best crypto exchange with the lowest fees is Cash App.

Understand the factors that influence its price. Keep long and short-term targets for trading. Set a risk-reward ratio to suit your trading style.

How To Trade Litecoin

  • eToro cryptocurrency trading platform provides access to popular cryptos like Litecoin, Etherum, and Bitcoin. You get real-time tracking along with security features. eToro charges a single spread and not a fee when you place a buy or sell order.
  • Coinbase is a popular investing platform. There are more than 35 million users on it.
  • You can buy on the Gemini crypto exchange by creating an account and entering the required information.

Ensuring My Litecoin Trading Is Profitable

If you are looking only at price action, you can trade LTC. Choose top cryptocurrency exchanges like Binance, Coinbase, Kraker, Crypto.com, or Coinmama to buy, sell and trade the digital assets.

Buying Litecoin Beginners Vs. Professionals

Choose the best crypto platforms that offer a diverse range of coins for trading. You can choose the best cryptocurrency trading platform that accepts fiat currency to participate in the market. They also accept PayPal, debit/credit cards as payment methods for the crypto.

The Best Way For Beginners To Buy Litecoin

As a beginner, you can choose centralized cryptocurrency exchanges. The user relies on a third party to protect the assets and oversee the transaction. The best cryptocurrency exchanges that are centralized are Coinbase, Kraken, Binance, and Gemini.

As you gain confidence, you can choose decentralized exchanges. Bisq is the lowest fees crypto exchange. Beginners can use the day trading strategy or futures as a crypto strategy. If trading platforms provide a demo account facility, beginners can learn more about the market by using fake currencies. You will not lose money, but you will gain experience.

Make sure that you invest only what you can afford to lose. Plan out your strategy and decide on the entry and exit points. Set stop-loss limits. When your trade is profitable, it is best to book profits. Do not wait for long.

How Pros Buy And Invest In Litecoin

If you are a professional trader in crypto, you can choose crypto trading platforms with analysis tools and charting platforms. Determine the type of platform from top crypto exchanges that will suit your trading need.

Professional traders have the best app for crypto trading. The Cash App, Binance, and Bisq have the best app for crypto trading using laptops and smartphones.

As a professional, you should diversify your portfolio. Use the charts to analyze the crypto market. Only professionals who know about crypto trading should trade CFT. If you are using a crypto bot, you should be able to preset the trading instructions.

Strategies for Beginners and Professionals

If you are a newbie, you can use day trading or futures as a strategy. However, if you are a professional, you can choose CFD or use a trading bot.

Crypto Day Trading

Litecoin is one of the popular day trading cryptos. Its trade volume is high, and users benefit from its wide price swings. While day trading cryptocurrency LTC, traders use daily charts to observe the price charts and volume traded. Traders have to be patient while crypto day trading. The 15 minute-charts are best for day trading cryptocurrency.

Cryptocurrency Futures

Traders can take long or short positions through cryptocurrency futures. It has built-in leverage to guard your investment.

  • To invest in cryptocurrencies, you can get an LTC wallet like Exodus, Edge, or Ledger.
  • Research the cryptocurrency broker’s fee schedule. They charge a commission or a fee for the purchase or sale of crypto. Make a comparative analysis if you are a frequent trader.
  • The eToro crypto is the lowest fees crypto exchange that allows copy trading.
  • eTrade crypto offers future trading. eTrade crypto charges a higher fee of $2.5 for each contract.

Crypto CFD

Crypto CFD is known as a contract for difference. It is a contract between the brokerage and the trader. The trader will not own the cryptocurrency but use it for speculation purposes. However, CFD is a risky strategy that only professionals should use. Traders use CFD to speculate on the future market movement of digital assets.

Crypto Trading Bot

The crypto trading bot automates the trading positions of the user based on key technical strategies. While day trading crypto, traders use the moving averages strategy and preset the buy and sell levels.  It triggers the automatic buy and sell signal.

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The crypto trading bots like Coinrule and Pionex give traders access to unique trading bots to automate the investment strategy. You do not have to pay additional charges for the facility. With crypto trading bots, you do not have to monitor the market constantly. 3Commas has the facility for manual trading and bots. The app is a facility that is available on all your devices.

Best Crypto Trading Platforms

If you want analytical tools to help you buy and sell digital currencies, you should choose the best crypto trading platforms with strong security features and low fees.

The best crypto cryptocurrency exchange is Coinbase because it keeps the assets secure and provides transparent pricing.

  • You can open an account from the best crypto exchange, by which you gain access to a cryptocurrency platform to buy and sell crypto. The best crypto exchanges are Coinbase and Coinmama that give access to trading in other crypto tokens too.
  • You can choose an eToro crypto trading wallet that provides fake money to start your trade before you actually enter the market. eToro is the best crypto trading platform for forex and crypto currency trading. However, its trading fee is high.
  • com is a crypto currency trading platform on which you can trade, buy and sell LTC.

Best Cryptocurrency Brokers

Choose the best cryptocurrency brokers depending on your needs as a trader or investor according to your investment style.

  • Interactive Brokers do not charge on a spread. It is an all-in-one platform where you have access to crypto, stocks, funds, and bonds.
  • Gemini cryptocurrency broker helps you execute your trading strategy with easy-to-use tools.
  • WeBull crypto broker supports popular crypto like Bitcoin, Ethereum, Dogecoin, and other altcoins.
  • Coinbase is the best crypto exchange with the lowest fees. It provides facilities like indicators and charts. Coinbase, the crypto broker has extensive educational resources and is an ideal interface for new traders.
  • Voyager platform offers a free cryptocurrency trading structure that is app-driven. Block Fi also offers free crypto trading with no commission or fee.

Tax Liabilities on Litecoin

If you own or use Litecoin, you owe taxes to the government. It is taxable income. Experts predict that there is a potential for LTC to move higher in 2021.

Tax on Litecoin US

The IRS states that cryptocurrency is not currency but property.

  • If you mine the digital asset, the value is immediately taxable.
  • The cryptocurrency tax rate is the same as the capital gain tax rate. Authorities calculate crypto-asset gain by calculating your income and the crypto holding period.

Tax on Litecoin UK

If you hold crypto assets in the UK, you have to pay taxes on profits made on digital assets. It is a Capital Gains Tax or CGT. You have to pay the difference between the cost price and the sale price of the crypto assets.

The HMRC states that you have to pay taxes on the gains made by selling the crypto assets and not on the amount invested by you. Even if you exchange one type of crypto for another, it is subject to CGT.

Mining and Staking activities are subject to income tax.

How Much Do You Need To Start Investing In Litecoin

To get started in LTC investment, you may require a $50 minimum deposit for US clients. Make sure that you do not expose all your investment to the crypto market. Invest only what you can afford to lose, as almost a third of investors in crypto are unable to make profits.

Litecoin Investors Summary

Litecoin has a bright future due to its partnership and integrations, but it has its drawbacks too.

LTC does not have universal acceptance. User confidence grows only when they are sure that the currency will not lose its value in the future.  Though this digital crypto claims to have more benefits than Bitcoin, its prices cannot move higher unless  users accept LTC. When the number of buyers and sellers increases, it will push LTC prices higher. Major companies have to adopt crypto to see its prices spike. The best crypto cryptocurrency exchange is Coinbase because it has strong security features and transparent pricing.

LTC prices are more stable and are acceptable by users as a standard currency. The digital asset can be good for speculative trade but is not good for long-term investment.

The cryptocurrency market is extremely volatile, so it is best for traders and investors to be wary about the crypto price movement.

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