In this article, we'll be treating in detail, on the reasons why it is advisable to invest in Litecoin and its Long-term potential. We will also be showing the different ways to invest in Litecoin and make sure of consistent profit while holding., the merits of doing so, etc.
What is Litecoin?
Litecoin is a digital currency, largely known on the markets with the symbol, LTC. It has been one of the leading cryptocurrencies since 2011, first time when it was launched to the public.
The token was birthed by a renowned software engineer, Charlie Lee, who was also a top software engineer at two top companies; Coinbase and Google.
Through the Litecoin foundation, He and his team are working to see that the token reaches greater heights in its all-round growth. A good step towards that goal is the recent adoption of the coin by UFC as its first and official digital currency.
With great potential certainly comes great responsibilities, and in the case of Litecoin, its great strides have certainly placed it up there in the altcoin space to serve as a principal indicator sometimes.
The codes structure of LTC is closely related with that of BTC and some similar attributes like the fixed amount of mineable tokens, the periodic halving event that cuts the reward for miners, and also, like many cryptocurrencies out there, a blockchain not central to any governing body.
Decentralization is a primary attribute to most digital currencies. This makes them very different from the Fiat that is currently used worldwide. The paramount difference is the fact that cryptocurrencies aren't given and controlled by a central body or government, unlike the fiat. Instead they are generated following a cryptographic process.
Hard-capped at exactly 84 million LTC, the amount of LTC in existence, is the hard-capped amount of BTC multiplied by four.
The time spent mining a block of crypto is also reduced by one quarter on LTC, 2 minutes 30 seconds, in contrast to 10 minutes on BTC, and this makes for faster transactions on the network. The speed has allowed Litecoin to become a far more accepted means of transferring tokens between exchanges.
The time reduction difference in LTC gives it an edge of being more scalable that the cryptocurrencies preceding it. When processing transactions, the speed of Litecoin is 4 times that of Bitcoin. The transaction fees also were set to only 2% of that of Bitcoin. This fee setup is one of the reasons people are drawn to utilizing the token.
As for the total number of tokens, it was quite easy for the development team to come up with 84 million; If the token was 4times as fast as BTC, then logically there should be 4times as much tokens. Unlike fiat that can be hit by inflation and devaluation, the finite nature of the tokens protect them from such.
The coin got a bit of spotlight at the time when its founder decided to sell his staked up LTC at a time when the value spiked very high, and this caused a great fall in the price. He was able to correctly call the High and possible Low, which both played out. Now that it's back at the low price range, LTC has been marked as an advisable investment because it's certainly rising sooner or later.
The History of Litecoin
In the month of October 2011, Litecoin had its whitepaper published by Charlie Lee, a very serious bitcoin hodler, and so began its historic rise to the top tier. Mr. Lee was an employee at Google who, at the time, got really engaged with BTC and everything about it. It didn't take much for him to see the value in BTC, and also realize that if certain areas could be further worked on, it will definitely have an impact on the rate at which the public recognized and accepted cryptocurrencies. The areas to be further worked on were; the amount charged as transaction fees, the time taken to complete a transaction, and the eradication of swamped mining pools.
It took an impressive, record time of only 2 years to get up to a billion usd market cap. From that moment on, LTC continued to influence trends on the altcoin market.
The coin reached an ATH of US$360 in December of 2017. This was a massive 8200% increment in the space of a year. Prior to that, the price of one LTC was about US$4.40.
Like some fictional plot twist, the founder, Mr. Lee sold 100% of his LTC stake in December, 2017 and this saw to a plummet in the market value, which it hasn't fully recovered from till date.
Later on, he wote a post on Reddit, giving a meaningful explanation as to why he did what he did. He said that his decision stemmed from the reservations he had on his increasing influence on its value. When he wrote on Twitter about the token, some news on its price or recent strides, people claim that he has a few tricks up his sleeves for doing that. Owing to that, he felt a conflict of interest holding some LTC and also making posts on social media as the founder, because whether he likes it or not, what he says has a lot of influence, so he felt there was only one option left to level the playing field.
Is Litecoin a good buy?
To answer this question properly, let's look at its performance in 2019. It's true that the past experience can be quite deceiving when it comes to making present and future judgement, but in a situation like this it can help answer a few of questions, such as, if it is a good investment?
The first two months of 2019 saw Litecoin at about $30, and some aware investors were having a field day buying the dip until it spiked a whole 100%+, still within the first four months, all the way past to $60.
The rise didn't end there, as LTC kept rising to new highs, and by the 2nd month of the 2nd quarter, it got to an annual high of $146. This means that within 6 months, the token was able to reel in an ROI of 388% (almost 4x) for anyone who invested early, within the first two months.
Checking within the same time frame, Litecoin was giving out better returns than most of its top tier colleagues like Bitcoin, which gave an okay 263% ROI to investors. In August, a halving event took place, reducing the total reward miners get for mining, but not necessarily the prices. The halving event didn't really have an instant spiking or dipping effect on the value of LTC as an aftereffect.
As the year 2019 waned, so did the value of LTC that it had previously gained. Notwithstanding, the coin still maintained a profit ratio of 40% at the end of the year, which some people might be okay with, especially later investors. The earlier investors who did not sell however, wouldn't have been satisfied with those numbers as it is merely a fraction of what they had, nearly a tenth of it.
Is Litecoin still a good buy for 2020?
To give a plausible answer to this, it will be best to have a quick look at the price actions of Litecoin so far this year, and try to make correct predictions for the rest of the year.
The year kicked off seeing LTC around $41, and then getting all the way up to 100% turnover at $83 within the first quarter, a close replay of its 2019 activity.
Following the same pattern, a plunging dip set in, but way faster. The spike began to wane mid February, and on the 12th of March, the Global stock market crash got to LTC big time, bringing it down to $25. A bad loss of over 38% for whoever held on tight from the first month.
With the value of Litecoin only barely getting back up to its former heights at the beginning of the year, one question must be running through your mind; Is it still worth your investment after all?
Like many other altcoins, Litecoin still encounters a lot of resistance on the market despite the recent Bitcoin bull-run, that saw it get all the way to $19,000+.
Currently sitting at about $75.76 at the time of writing this, it has had a fairly positive month so far but not in the last couple days. Despite this, many analysts believe that Litecoin will get to its ATH, just like Bitcoin did, sometime in 2021. It's almost here, let's watch and see if the predictions all play out.
Different ways to Invest Litecoin
There are a few ways one can invest in Litecoin. Like practically every other cryptocurrency out there, LTC can be mined on the network, and it can also be bought on exchanges. This can be done by exchanging it with fiat or for another token in possession.
Soon as Litecoin is available in your wallet, there is more than one way you can invest your funds. We will be looking at the most common methods of LTC investment.
Option to Buy and Hodl
This option has to be the easiest to undertake. First of all, you'll have to buy your share of LTC from any exchange platform of choice. Soon as your transaction is confirmed, then your coins are transferred either straight to your main wallet (software or hardware), or they are first of all put in your online wallet for you to transfer it to your main wallet.
As soon as it enters your primary wallet, all you have to do is Hodl and wait for the perfect time to sell.
This method demands the least in skill acquisition or expendable resources, but still comes with a good deal of profit if played right, and loss as well, if care is not taken. A typical example of this scenario would be the price actions of LTC from 2019 to 2020. It spiked to about $146 in the 2nd quarter and lingered around for a few weeks, then by 2020, it fell all the way down to $34 in March. This was both a good and a bad transition for two different sets of people. Those who sold the spike got good gains, whereas those who held till march the next year, hoping for a miracle, missed out on that one.
Option to Trade it
Instead of the same old buying and saving it for the right time that most people are on, you can decide to go a different route with trading. You can make profits off the markets constant ups and downs. More profit stands to be made faster, but so are the losses too. With great rewards come great risks.
Using different trading methods and strategies, traders can exploit the fluctuations in different ways to their benefit. Even considering the leverage offered by different trading platforms, a price swing of 200% in either direction, when predicted correctly, could rake in profit reaching tens of thousands of u.s dollars.
Advantages of having a Litecoin investment
- Being one of the earliest altcoins on the market, LTC is most likely to retain value a lot better than later tokens appearing on the market.
- The technology behind LTC allows for cheaper transaction fees, compared to major coins like BTC. Although their structures are closely related, this is one of the areas where the Litecoin structure was improved upon, and also a reason people will tend to gravitate.
- Another area of improvement in the similar structures of BTC and LTC is in the area of transaction speed. The speed of transaction is 4× faster than that of BTC on average. While BTC clocks in at 10 minutes, LTC easily beats that at 2 minutes, and 30 seconds.
- Now, these areas of improvement also come with an extra. Because of the speed at which transactions are usually processed, it makes it virtually impossible for hackers and fraudsters to successfully carry out their plans. The time allowance is such a small one for anyone looking to double-spend.
Disadvantages of having a Litecoin investment
- Litecoin is undoubtedly one of the pioneer successors of Bitcoin, that built and improved on its original structure. Even though that fact can't be put to the side, a bunch of other newer and less costly competitions are popping up and giving the same advantages to users.
- Another even in the history of Litecoin that had a lot of investors raising their brows was when the founder sold all of his holdings. Although he gave legit reasons, and his work background and expertise still remain intact, many investors still aren't satisfied with just that. Some still reserve notions that the coin might have no future after all.
