fbpx
Investing in Litecoin

Digital currencies are still in their infancy when it comes to mass adoption. Investing in Litecoin is a solid choice for people looking to get into the market, with its low price and high potential growth. Investing in cryptocurrency can be intimidating, but this article will explain how you can invest without any risk of losing money!

Button (1)

4 Reasons to Invest in Litecoin

Mining is Still Profitable

Even in 2019, when proof-of-stake is rapidly becoming the standard way to acquire crypto, cryptocurrency mining is still popular. Mining has several benefits over staking since it does not require any crypto and allows you to be at a disadvantage.

It is also significant to remember that despite the fact that mining is still profitable and many people participate in it, it isn’t without risk. This is due to the number of miners that can be directly linked to the value and prospects of the coin.

It may appear counterintuitive, but there are still individuals mining Bitcoin. If mineable crypto lost its miners, its price would plummet immediately.

Mining isn’t to blame for Bitcoin’s stratospheric value (a smaller market cap and being the poster child for cryptocurrencies are two reasons), but it is one of the things that keep it, as well as all mineable cryptocurrencies, alive.

Faster Transaction Speeds, Lower Fees

The world of cryptocurrency is constantly changing as new coins, and transactions come into existence. One such coin, Litecoin, has been rapidly gaining popularity thanks to its faster transaction speeds (1/4th of those found with Bitcoin). These lower fees make their use viable for smaller amounts than other cryptocurrencies, which makes it more attractive in many ways.

This implies a lot for an investor. First, the transactions would cost you less if you were to spend your Litecoin.

This is especially important if you’re considering short- or mid-term trading rather than holding cryptocurrency. Every time you trade your currency for fiat or another cryptocurrency, you’ll spend less money on transaction fees.

It’s an even more essential detail if you intend on shifting currency, as it necessitates many crypto transactions to function.

While you wait a few more minutes for the transaction to go through, you could save up to 90 percent of your crypto trading fees.

Added Scalability Makes the Blockchain More Resilient

Hacking blockchains is unheard of, but there are methods to both hack them and bring them down.

Hacking them is nearly impossible since the “simplest” method would necessitate a single malevolent actor seizing control of more than half of the nodes in the chain, which would be prohibitively costly.

However, taking down a blockchain isn’t particularly difficult. It’s not simple, but it has been done before. In 2015, the Bitcoin network was subjected to a DDoS-style assault where malicious transactions were injected into the system at an overpowering rate, causing the network to slow down and eventually crash.

The Ethereum network was also struck by a fresh assault – a targeted DDoS assault against its main identified nodes.

Although Litecoin is not immune to assaults, as no network is, its security is considerably better than Bitcoin.

Yes, the reason is the same one for faster transactions and lower costs: Shorter transaction times.

Cheaper Cryptocurrencies Tend to be More Stable

Litecoin’s price fluctuations have historically mirrored those of Bitcoin, but not in terms of the latter’s valuation. This is typical among Bitcoin-based altcoins since their parent currency’s movements are copied.

However, while the costs aren’t identical and the heights aren’t as impressive for altcoins as Bitcoin’s, neither are the dips.

A smaller risk implies fewer price changes, which is great for newer investors or individuals who want to preserve value rather than increase it.

Therefore, Litecoin can be seen as a better alternative to Bitcoin. You run the chance of losing your investment with both, but you have a smaller chance with Litecoin.

How to Invest in Litecoin

Investing in cryptocurrencies is more than simply buying them and keeping them, although this is certainly a smart option depending on your objectives.

There are many different methods to invest in the stock market, just as there are several routes to investing in cryptocurrencies.

Some tokens are better for specific sorts of trading, but they all may be traded and invested in if you know what you’re doing.

Buy and Hold

Let’s start with the most fundamental technique: you can indeed buy Litecoin and store it, hoping that its price will rise over time. The most frequent investment strategy is buying and keeping, particularly among individuals who aren’t attempting to use cryptocurrencies as a get-rich-quick scheme.

The technique is straightforward since it follows in the footsteps of its namesake:

As with any investment, you should buy as many tokens as your cash allows. Then allow them to sit there until you feel it’s the right time to either branch out or diversify your holdings.

That’s all there is to it. There are no secrets, and if you’re playing the long game, there aren’t any unique techniques to follow. The “buy and hold” technique is incredibly simple.

Results will differ, of course, and it’s advisable to keep an eye on the crypto market just in case things go sour.

After all, it is quite simple to lose your money simply by investing it and never looking at the market. Yet, since you’re playing the long game, reacting to minor market changes isn’t a good idea — and riding through the comparative highs and lows may be the better choice.

This technique will take the longest to produce any revenue, but if played correctly and with a little luck, it may also provide you the largest profit.

IRA Investments

Another popular cause for purchasing cryptocurrencies is to invest in an IRA. This is similar to buying and holding, as it’s a long-term investment with the goal of being on top of the market 24 hours a day, seven days per week.

An IRA is a way to invest money for retirement. You can invest in stocks or other things. The difference between an IRA and the buy and hold method is that if you are investing for your IRA, you might not bother about making a lot of money but instead want to make sure your investment grows over time.

While generating a profit on your retirement assets is wonderful, the primary objective for you with said investments is to protect your savings from depreciating.

That is, markets that aren’t typically thought of as slow to buy and hold may be ideal for IRAs if you have already invested in a spread with a higher probability of turning a profit.

Short-term Trading

Short-term trading is a riskier investment strategy, but it is also the most likely to provide a return in the near term.

The money generated by short-term trading won’t be as much as long-term trading, but it is the only way for many individuals to invest their funds, and some people may make a decent living out of these earnings.

There are two distinct sorts of short-term trading, to be more specific.

The first method is to buy and sell cryptocurrencies based on relative highs and lows, generally waiting a few days between fluctuations while the market corrects itself. It’s a lengthy way of doing things, but if you know the market well and can spot trends in pricing, it might work.

The second, most common short-term crypto investment method is day trading. Day trading gets its name from the basic rule that you buy cryptocurrencies in the morning and sell them at night.

It is all about recognizing which token has the best potential to rise during the trading day and purchasing a sufficient quantity of it to recoup at least a portion of your investment.

In these strategies, especially in day trading, the profits are paper-thin and will never enable anyone to become a millionaire.

Furthermore, day trading is tough where many financial experts do not recommend it since it’s basically the same as playing the Forex market. It’s not that it’s impossible to earn a living from it, but that you have to be very precise in order to profit.

button2 (1)

How To Buy Litecoin

Since Litecoin is one of the most widely acknowledged cryptocurrencies on the market, it can be purchased and sold in a variety of exchanges. Even exchanges are known for specializing in a certain number of cryptocurrencies that frequently offer Litecoin.

For this article, we will use Coinbase. It is one of the oldest and most trusted exchanges in the world. People can buy cryptocurrency safely on it.

Choose a Cryptocurrency Exchange

The most popular way to purchase cryptocurrency is through an exchange, such as Coinbase or Gemini. Several investing and payment applications also sell cryptocurrency, including Cash App, PayPal, and Venmo. Here’s what to look for while finding a place to purchase Litecoin.

  • Security: Examine the security procedures of the platform and look for any instances in previous years, such as hacks or stolen funds. The most vital aspect of a crypto platform is that it protects your assets and personal information.
  • Fees: There are costs for both purchasing and selling cryptocurrency. Make sure the platform you choose has fees that are comparable to other top exchanges.
  • Ease of use: Buying cryptocurrencies should not be a burden; therefore, make sure to choose a platform that you are familiar with.

Another thing to think about is crypto selection. It’s not a huge deal if you’re only interested in Litecoin since most exchanges offer it. However, if you plan on investing in smaller coins in the future, the choice of exchange is critical.

Set up Your Account

After you’ve chosen a Litecoin exchange to buy from, it’s time to register an account. The procedure varies by exchange, but there is usually a button that says “Get started” or “Register” on the home page.

Create an account by filling in the relevant information. The following are among the data required for accounts on most apps and exchanges:

  • Full name
  • Email address
  • Phone number

That’s simple enough, but you’re not finished yet. To operate a cryptocurrency exchange, you must also verify your identity. KYC is the process of verifying your identity (also known as “Know Your Customer”). You won’t be able to buy cryptocurrency or make large transactions until this has been completed.

Expect to provide the following information for the KYC procedure:

  • Date of birth
  • Address
  • Social Security number
  • A copy of a driver’s license, valid passport, or ID card

Decide How Much Litecoin

The fundamental rule for Litecoin and any cryptocurrency is only to invest what you can afford to lose.

Cryptocurrency is extremely volatile, and prices can rise dramatically before coming down again. Make cryptocurrency your retirement plan, not your emergency fund. Dedicate no more than 10% of your investment portfolio to cryptocurrencies as a general rule of thumb.

Consider how often you expect to buy Litecoin. Some investors make a single big purchase or several smaller purchases with no apparent rhyme or reason. Dollar-cost averaging is frequently a better option for cryptocurrency investing.

Make your Purchase

The payment method and purchase procedure are determined by the exchange you selected. Credit cards, debit cards, and ACH transfers from a bank account are all available as payment options. Bank transfers are generally the most desirable since paying using a debit or credit card may incur extra costs.

There is one disadvantage to using a bank account transfer: speed. The transaction generally takes several days to complete, and the cash has to arrive in your account shortly after.

Once the funds are available, select “Buy” and choose Litecoin. Enter the amount you wish to purchase and review the transaction preview to view the costs and how much Litecoin you will receive. If everything is correct, confirm the transaction.

Make sure to keep track of how much you spent and how much Litecoin you received. When you sell Litecoin or trade it for another cryptocurrency, this is considered a taxable event.

You’ll end up with your own Litecoin if you follow those procedures. You can also look into crypto wallets, which offer greater security than regular digital wallets. Many investors keep their cryptocurrencies on the exchange where they acquired them, but sending them to a crypto wallet provides extra protection.

Where to Invest in Litecoin

Opening an account with a crypto exchange is typically the first step in investing in Litecoin (or any other type of cryptocurrency). A trading platform is available on which you can buy and sell cryptocurrencies by placing buy and sell orders.

There are several crypto exchanges to choose from. Some of the criteria you should look for when selecting a broker might include:

Coin access

There are hundreds of cryptocurrencies available, and no single broker will allow you to buy and trade them all. Making a list of additional cryptocurrencies to invest in may help you ensure that the broker you pick satisfies all of your requirements.

Trading Platform

Some crypto trading platforms are designed for individuals who aren’t familiar with the market, while others appeal to more sophisticated investors with charting systems and analysis tools. Depending on your trading experience, you’ll need a certain type of platform.

Fees and Commissions

Each crypto transaction you make with a cryptocurrency broker incurs an expense or fee. Before you create an account, carefully investigate each broker’s fee structure because fees can quickly deplete your earnings if you’re a frequent trader.

button3 (1)

Alternatives

Bitcoin

Bitcoin is the most adaptable cryptocurrency available. It may be used to buy anything from a growing list of merchants that offer Bitcoin payments, including well-known firms like Expedia, Overstock.com, and Tesla. It may be given in exchange for services rendered or used to pay off outstanding obligations. It can be traded for other currencies, both traditional and virtual, on electronic exchanges that function similarly to forex markets.

Bitcoin is a complicated yet revolutionary currency that uses highly advanced mathematics and engineering to prevent unauthorized duplication or creation. The source code’s underlying principles are based on cryptography which makes it virtually impossible for anyone with ill intent towards Bitcoin users’ wallets to access them without being detected first.

Pros

  • Protection From Payment Fraud
  • Reduced Possibility of Identity Theft
  • Direct Transfer
  • International Transactions.

Cons

  • Scams and frauds
  • Black market activity
  • Price volatility

Cardano

Think of Cardano as a platform for building applications that tackle a wide range of problems. The Cardano network opens the door to using blockchain technology to better the world we live in, from preventing counterfeit medication to providing access to microfinance.

Cardano, like Bitcoin and Ethereum, utilizes the proof of stake (PoS) mechanism to produce new blocks in the chain and verify transactions. Only a tiny percentage of users who own Cardano can mine ADA, which minimizes energy consumption considerably. While the proof of stake (PoS) system of Bitcoin does place a limit on how many computers may mine, its proof of work (PoW) model has no such limitations. As a result, as Bitcoin’s value rises, more organizations devote more computing power to mining it.

Pros

  • Environmentally friendly
  • Peer-reviewed technology
  • Substance over hype

Cons

  • Overly Focus on Design and Engineering, instead of Security
  • Proof of Stake Instead of Proof of Work

Related Articles:

Recommended Services:

Ethereum

Ethereum is a cryptocurrency and decentralized application platform built on blockchain technology. It allows you to build smart contracts, decentralized applications (dApps), tokenized assets, and decentralized financial services on its network.

Ether is the second-largest cryptocurrency, by market capitalization, at the time of this writing and has maintained that position for a long time. It is also known as ETH since it is the token used to pay for transactions on the Ethereum network.

Ethereum is considerably more complicated than digital transactional currencies like Litecoin or Bitcoin. It allows traders to participate in something completely new and potentially much larger – a decentralized, digital ecosystem.

Pros

  • Well-known Founder And An Expanding Developer Community
  • Ethereum Continues To Attract More Businesses
  • Ether Is Not Capped

Cons

  • Ethereum Uses A Complicated Programming Language
  • High Transaction Fees 
  • Ethereum Struggles With Scaling

Conclusion

If you’ve been considering investing in cryptocurrencies, Litecoin provides an opportunity to do so without the same level of risk as Bitcoin. With prices historically following trends for Bitcoin, now is a great time to invest since most cryptocurrencies are on the rise. Whether you want to buy and hold or trade in your coins, there are plenty of options available on exchanges that provide access with just a few clicks!

Scroll to Top