5 Ways To Invest In Litecoin In 2021
Litecoin (LTC) is a fork of Bitcoin, which like its parent cryptocurrency has its basis in an open-source global payment network, and is not bound by any central authority. Launched in the year 2011, it is also the largest and most popular of all the Bitcoin forks in the market today. LTC uses the original codebase of Bitcoin, and was modified to optimise BTC’s block-creation speed by four times. Hence, while Bitcoin transaction confirmations take close to 10 minutes, Litecoin transactions get confirmed in under 3 minutes.
All these aspects and more make Litecoin a very attractive cryptocurrency for long-term investment purposes. The LTC coin was trading at around $257 per coin with a market cap of around $16.2 billion at the time of writing this guide. Let’s now go over 5 unique ways in which you can invest in Litecoin, and potentially register some profits for yourself.
1. Trade Litecoin
Of all the Litecoin investment methods used by people in the crypto market, trading the cryptocurrency through a reputed broker service constitutes the most frequently-used option these days. You’d be mainly utilising Contracts for Difference (CFDs), and perhaps a couple more well-known financial derivative products like Futures and Options to trade LTC. As you might be aware, these investment vehicles involve speculating on Litecoin price movements, in the hope of making some profit. It is important to highlight here that such trading activity does away with the need of actually exchanging the ownership of Litecoin tokens, and hence doesn’t require the use of any crypto wallet either. Furthermore, it is ideal for people who have been into crypto trading for some time and have hands-on experience working with certain well-known analytical tools.
Where to trade Litecoin
As mentioned above, when you choose to trade LTC this way, you will require the services of an established cryptocurrency broker platform that offers the financial derivative product of your choice. It is important that this broker is regulated by a reputed authority, so as to keep any antisocial elements away from the trading platform and avoid any kind of risk to your crypto holdings. There are some other crucial factors you can use to choose the best broker website for your needs, like customer service, payment methods, spreads, security technologies and more. We conducted a detailed comparative analysis on the top-rated brokers in the market, and have listed the best of them for your use below.
2. Buy and HODL
The term HODL originated from a Bitcoin forum in 2013, when a drunk investor misspelled ‘Hold’ as ‘Hodl’, in a rather amusing rant! HODL in this phrase can also be perceived as a short form of ‘Hold on for Dear Life’! ‘Buy and HODL’ is a widely-implemented investment strategy today, which essentially refers to buying a cryptocurrency and then holding on to it for a long time, until its price appreciates to an acceptable level.
The most effective and direct way to use this trading strategy is by purchasing LTC from a regulated online platform and then storing your coins in a cold hardware wallet for the long term. Reputed cryptocurrency exchanges and some specific broker platforms which allow for the sale and purchase of actual LTC coins, are the best places you can buy LTC from, for this purpose.
As buying and holding Litecoins would involve their purchase from a regulated platform through a preferred payment option, we carried out thorough research on multiple places where you can buy Litecoin from, in a safe and hassle-free way. Thereafter, we created dedicated web pages on our website which detail the most effective ways of buying LTC via some specific payment modes such as Paypal, credit card and debit card. We have listed the links to these pages below. Please be aware, while these payment options constitute some of the most commonly used means of buying cryptocurrencies, their availability in your country/state of residence will depend entirely on the local cryptocurrency laws. In addition, you may also have to pay a little extra for their usage, in the form of transaction fees.
3. Invest in Cryptocurrency and Blockchain Companies
If the idea of trading or buying Litecoin seems uncomfortable to you, you can perhaps invest in this cryptocurrency in an indirect way. We’re referring to the option of purchasing the stock of a company which either has Litecoin well-integrated into its business model, or is heavily invested in the cryptocurrency. When you choose this LTC investment route, you’d be in with a chance to profit both from that company’s market performance as well as the general sentiment surrounding Litecoin per se. Please bear in mind that you may once again require the services of a well-known broker, to purchase the shares of any such LTC or blockchain-based organization.
Where to invest in Litecoin shares
You can use a couple of different ways to invest in the shares of an LTC-based company. The first is purchasing the actual ownership of the company’s shares through an established broker service; and the second is using financial derivative products, like the ones mentioned earlier in this article, to speculate on and possibly profit from the market price movements of those shares.
For the latter, the broker may also allow you to use the leverage option for your long/short positions, thus helping you obtain considerably higher market exposure for your trades. Please note, using leverage to trade any stock, though can be highly rewarding, also involves plenty of risk. Additionally, when you indulge in such trading activity, you may indirectly profit from LTC, without actually owning any of it.
Needless to say, you must opt for only the best broker services to implement this kind of investment strategy. To locate the ideal broker platform for your needs, you will have to carry out detailed research and compare the best ones on important parameters like their regulatory status, value-added services, payment methods, fee structure, user-friendliness and more. We did all of this on your behalf, and have provided below a list of the best broker services that can be found on the Internet today.
4. Become a Miner
Litecoin uses the ‘Proof of Work’ (PoW) consensus mechanism for transaction validations on its blockchain. It uses something called the ‘Scrypt’ Proof of Work algorithm for this purpose. What sets this algorithm apart from Bitcoin's ‘SHA-256’ is that it’s more secure against hardware brute-force attacks and is quicker than its Bitcoin counterpart. In fact, this justifies the entire point of creating Litecoin, as it was meant to improve on Bitcoin’s flaws. To give you an idea, while each Bitcoin block gets confirmed in around 10 minutes, Litecoin is 4 times faster and completes that job in 2.5 minutes.
You can easily become a Litecoin miner as long as you have the necessary resources and funds to set up technical infrastructure for the same. While at one point in time you could use cheaper CPUs and GPUs to mine LTC, today people have complicated and more expensive Litecoin ASICs which give them an edge over other miners. Hence, if you have the funds you can indeed opt for a standalone Litecoin mining project. Else, you can choose to join a mining pool or use cloud mining services of third-party providers. However, please be mindful of the agreement clauses and reliability of cloud mining operators, if you choose to use them.
At present, Litecoin miners are awarded 12.5 new Litecoins per block, with the next halving scheduled for around August 2023, when this block reward will drop down to 6.25 LTC per block. Considering the current LTC market price of around $265 per coin, with the promise of appreciating further in the future, mining LTC can indeed be a profitable venture.
Where to store Litecoin
Any new LTC coins you acquire through mining, trading or buying activity will need to be safely stored inside an LTC wallet. You can find multiple types of dedicated LTC wallets as well as general cryptocurrency wallets in the market these days. They can be broadly classified into software and hardware kinds, created to meet different purposes. Whilst hardware wallets are ideal for long-term LTC investors, software wallets work best for people who prefer their LTC coins to be readily accessible for day-to-day use. Below listed are some of the best cryptocurrency wallets you can use nowadays.
5. Become a Litecoin Developer to Make Money
Litecoin was primarily created with the idea of providing low-cost, quick and secure payments, by exploiting the potential of its predecessor, Bitcoin and the blockchain technology overall. Therefore, Litecoin doesn’t serve as your ideal development platform, like some other well-known cryptocurrencies like Ethereum, Cardano, and others, which are actively used for the creation of decentralised apps (dApps) and smart contracts.
Expert Tip on When and How to Invest in Litecoin“ To give you a final roundup, we delved into the 5 most commonly used ways of investing in Litecoin, in this detailed guide. These were: trading Litecoin at a brokerage platform, buying and holding onto LTC, investing into the shares of a Litecoin-powered business, mining Litecoin and finally becoming a blockchain developer. One of the main considerations you should keep in mind when you invest in Litecoin is that you can benefit immensely if you learn about some market analysis tools and can effectively gauge the impact of future developments related to the coin. Lastly, please remember, the timings of your LTC investments may not matter much if you’re sure about your due diligence and are open to learning from your mistakes along the way. ”