Is Litecoin a good investment? Litecoin is a peer-to-peer cryptocurrency network and open-source project that expands upon the original technology behind Bitcoin. Litecoin was among the 1st altcoins to enter the market and is currently the 13th largest cryptocurrency in the world in market capitalization. Litecoin offers a number of benefits for users over Bitcoin, including faster processing speeds and lower transaction costs.
Simply Put: Is Litecoin a Good Investment?
While Litecoin does structurally improve upon Bitcoinâ€™s technology, it still presents risks to investors. Litecoinâ€™s rapidly aging infrastructure is no longer as unique as it was when the coin debuted in 2011, with many altcoins now offering the same benefits and efficiency. Litecoinâ€™s founder, Charles Lee, also sold his stake in Litecoin in 2017, which has affected investor confidence.Â
Where to Invest in Litecoin
Investing in Litecoin (or any other type of cryptocurrency) typically begins by opening an account with a crypto exchange. A crypto exchange offers you access to a trading platform where you can buy and sell cryptocurrencies by placing buy and sell orders.
There are dozens of exchanges offering access to the cryptocurrency market. Some of the factors you might want to consider when you choose a broker might include:
- Coin access. There are thousands of cryptocurrencies in existence, and no single broker will allow you to buy and sell all of them. It can be helpful to make a list of cryptocurrencies beyond Litecoin that you want to invest in to be sure that the broker you choose fits all of your needs.
- Trading platform. Some crypto brokers focus on providing a simple, streamlined ordering process, while others appeal to more advanced investors with charting platforms and analysis tools. Your experience trading will determine which type of platform is best for your needs.
- Fees and commissions. Most cryptocurrency brokers charge a fee or commission on each crypto purchase or sale you make. Research each brokerâ€™s fee schedule before you open an account, as fees can quickly cut into your profits if youâ€™re a frequent trader.
Not sure where to begin your search? Consider opening an account with a few of our favorite beginner-friendly exchanges offering access to Litecoin.
eToro is a cryptocurrency trading platform that provides you with access to some of the worldâ€™s most popular cryptocurrencies. Trade Litecoin, Bitcoin, Ethereum and more with real-time data tracking and top-level security. You can even practice your trading strategy before you enter the market with eToroâ€™s virtual trading wallet, which gives you $100,000 worth of fake money to trade with.
One of eToroâ€™s most unique features is its spread-based commission schedule. eToro doesnâ€™t charge a flat-rate percentage fee on your transactions, and unlike most other brokers, eToro doesnâ€™t charge a fee on both buy and sell orders. Instead, youâ€™ll pay a single spread no matter when you buy and sell.
Say eToroâ€™s current spread for Litecoin is 1.90%. If you place 1 order to buy 100 Litecoins at $80 each, youâ€™ll pay a fee of $152 (1.90% of your $8,000 order value). If the price of Litecoin then increases to $85 and you decide to sell, eToro will add a fee of $9.50 on your sell order. This is because 1.90% of your sell order value ($8,500) is $161.50, and youâ€™ve already paid $152 in fees, so you must only pay the outstanding balance.
This unique fee schedule also works in reverse. For example, letâ€™s say that you buy 100 Litecoin at $80 and pay $152 in fees. Then, the price drops to $75, and you decide to sell. In this case, youâ€™d receive $9.50 back from eToro. This is because the spread fee only applies to the final price of the sell order. Also, 1.90% of $7,500 is $142.50, and you paid $152 when you placed your buy order â€” eToro will provide you with a credit for the difference ($9.50). This unique pricing model can help you manage losses more effectively.
Coinbase is among the largest and most popular cryptocurrency investing platforms in the world, with 35 million verified users and 100 supported countries. With 39 cryptocurrencies available to Coinbase users in the U.S., it offers a diverse range of opportunities for investors. From major names like Uniswap and Aave to smaller offerings like OMG Coin and Cosmos, there are plenty of opportunities to discover on Coinbaseâ€™s platform.
Coinbase is popular with beginners in particular thanks to the platformâ€™s intuitive layout and simple account signups. Most users will be able to open an account in just a few minutes, and you can place your order with a few clicks from your home screen. Coinbase is also 1 of only a few brokerages that allows you to buy cryptocurrency using a credit card. This can be a great option if you arenâ€™t comfortable linking your bank account to your Coinbase account directly.
After you make your purchase, you can track your holdings online â€” Coinbase will automatically create a graph that displays how your portfolioâ€™s value is changing over time. The platform even allows you to schedule recurring deposits that allow you to automatically authorize investments on a schedule you set.
Interested in learning more about the crypto market before you invest? Coinbaseâ€™s unique â€œEarnâ€ feature allows you to watch a few short beginner-friendly videos about the technology that supports each coin offered on the platform. After you learn, you can answer a few quiz-style questions on each crypto. For each question you answer correctly, youâ€™ll earn a small amount of free crypto, which youâ€™ll see in your account. Coinbase Earn can be an excellent way to explore coin offerings and start your portfolio without spending any money.
Gemini is a cryptocurrency exchange and custodian that offers investors access to 26 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.
Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Geminiâ€™s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. And Gemini offers a number of unique features over competing cryptocurrency brokers, including:
- A range of platform options.Â Gemini offers both a standard, simple web interface as well as a more advanced ActiveTrader platform. This allows you to customize your Gemini experience to your trading skill level.
- Wide selection of cryptocurrency offerings.Â Gemini provides support for a diverse mix of 48 cryptocurrencies, ranging from major projects to smaller altcoins.
- Dynamic price alert features.Â Mobile investors will love the Gemini appâ€™s alert features, which allow you to receive a push notification when an asset youâ€™re interested in reaches a predetermined price target. You can even set alerts to inform you when an asset increases or decreases in price by a predefined percentage.Â
Advantages of Litecoin Investments
As among the 1st altcoins on the market, Litecoin typically holds its value better than newer altcoins with lower market capitalizations. Letâ€™s take a look at a few of the advantages of the Litecoin network and technology.
- Lower transaction costs. Litecoinâ€™s technology offers a number of improvements on Bitcoinâ€™s infrastructure, including lower transaction costs. When you send Bitcoin from wallet to wallet, you lose a bit of crypto as the transaction is verified on the blockchain. Though Litecoin operates in a very similar manner, its network is more efficient than Bitcoin, which means that you lose less money when you initiate or receive a transfer. This is a major benefit for users who turn to cryptocurrency for its benefits as a secure money transfer system.
- Faster transaction speeds. Litecoinâ€™s improved network doesnâ€™t only extend to processing fees â€” it also enables users to send coins much faster when compared to Bitcoinâ€™s blockchain. The average Litecoin transaction takes about 2.5 minutes to complete, while the average Bitcoin transaction closes in an average of 10 minutes.
- Open-source platform. Litecoin is built upon a naturally open-sourced fork of the BTC Core Client. This makes it much easier for developers to adjust the system and implement new features to keep up with the changing needs of the market. Its flexibility also allows developers to implement software security patches on a regular basis to keep up with hackersâ€™ changing methods of attack.Â
- Recognizability. Litecoin has been around for quite a while, and has remained one of the most well known altcoins despite its modern technological irrelevance.
Disadvantages of Litecoin Investments
Like any type of new technology, Litecoin also has drawbacks. Letâ€™s take a look at a few of the cons that you should be aware of before you invest.
- Competing altcoins that offer similar benefits. Litecoin was very early to the market and among the first altcoins to expand upon Bitcoinâ€™s network. While it still holds its own in speed and efficiency, many other more affordable cryptocurrencies operating on their own blockchain offer similar processing times and transaction security.
- Less Security. While Bitcoin remains the most decentralized cryptocurrency in existence, and therefore the hardest to 51% attack, Litecoin lags behind in hash power as the network struggles to attract new users in the ever more competitive altcoin space.
- Shaky faith in leadership. A major draw to Litecoin was its development by Charles Lee, a former Google software engineer and a respected name in the cryptocurrency industry. Lee sold all of his stake in Litecoin in 2017, citing a perceived â€œconflict of interest.â€ This has called leadershipâ€™s faith in the coin and its future into question.Â
Invest in Altcoins
Though Litecoin does offer a few long-standing benefits over Bitcoin and is currently the 13th largest cryptocurrency by market capitalization, itâ€™s important to remember that the crypto industry is still largely unregulated.
If you decide to invest in Litecoin (or any other altcoin) always work through a trusted exchange â€” and never invest more money than you can afford to lose.Â Â
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