Is Litecoin a good investment?
Generally, Litecoin can be a very smart and lucrative investment. Litecoin has a lot of potential to grow in the future, so the odds are that Litecoin is a good buy. Actually, LTC is one of the most preferred cryptocurrencies to invest in as there are high expectations for adoption.
Litecoin has a low price and its value is expected to go up according to crypto experts.
Want to buy Litecoin? Here's what you need to know
Litecoin prices rallied from the end of 2020 to mid-2021. From trading at $46 in early October 2020, the altcoin’s value has appreciated by close to 800% to trade at $360. Much of this excitement was ignited by the announcement about the Mimblewimble confidentiality upgrade to the LTC network and fuelled by the early 2021 crypto market rally.
Some analysts had also traced it back to the launch of the LTC-only Visa debit last summer. Others associate it with PayPal’s partnership with New York-based Paxos that allows US residents to buy Litecoins with their PayPal balances. Yet, others associate it with Charlie Lee’s return from Coinbase as the managing director for the Litecoin Foundation.
Whatever the case, the LTC price rally peaked on 10th May 2021, when the all-popular crypto set a new all-time high of $412.96.
Since then, influenced by the broader market sentiment, it has shed close to 56% of the peak price and currently is trading at around $180. And this drop in price saw it fall off the list of ten largest cryptocurrencies by market cap for the first time in seven years.
Looking at wild Litecoin price movements, you must be wondering whether LTC is a good buy. It also leaves you with such questions as how much LTC will be worth in the future and how much you should invest in the 16th largest crypto.
We answer all these in this Litecoin investment guide. First, though, we want to understand what is Litecoin and how it works.
What is Litecoin?
Litecoin is a cryptocurrency created by a computer scientist, an ex-Google employee, and one of the earliest Bitcoin Miners - Charli Lee. According to him, the creation of Litecoin was born out of the need to solve the Bitcoin blockchain’s inherent limitations, especially when it comes to scalability, speed, and cost. And while it is a standalone crypto project, it borrows heavily from the Bitcoin blockchain code.
It appropriates bitcoin’s anti-inflationary concept by setting a hard cap on the total supply of the LTC coins. But while BTC’s cap is 21 Million coins, LTC’s cap is 4X at 84 Million coins. Further, while transaction confirmation and processing take 10 minutes on BTC blockchains, LTC is 4X faster at 2.5 minutes. Litecoin fast processing speeds have ensured that transaction fees remain relatively low even with the coin’s mass adoption and increased transaction volumes.
However, Charlie did not mean for Litecoin to compete with Bitcoins. He even introduced the LTC crypto project on a bitcoin community forum, referring to it as the silver to Bitcoin’s Gold. Today, both cryptocurrencies that were initially intended to facilitate payment processing and cross-border cash transfers are now used as speculative digital investment products.
Is Litecoin a Good Investment?
The dethroning from the league of ten largest cryptocurrencies notwithstanding, Litecoin remains one of the most popular blockchain projects. Analysts are also optimistic about its future price performance, and these factors are a valuable addition to your crypto portfolio. Other reasons why we believe that Litecoin is good investment include:
Litecoin has positive ROI
When Litecoin first launched in May 2013, it was trading for around $4.30. Eight years later, the cryptocurrency averages $134. This implies that if you had invested in the Bitcoin fork when it launched in the crypto markets, your investment would be reporting over 3,005.05% in Returns on Investment (ROI).
Analysis points to a bright future
Many crypto analysts are convinced that Litecoin prices will continue soaring in the foreseeable future. They are adamant that with all its premium features, including faster fees transaction processing and incredibly low fees, the cryptocurrency is massively undervalued and will price-correct upwards soon.
Litecoin will outperform Bitcoin in adoption
Today, more than 2,000 merchants across the world process Litecoin payments. As the crypto industry matures and moves away from the crypto exchanges to online stores in the banking sector, crypto experts believe that Litecoin’s fast translation processing and low fees will give it an edge over Bitcoin and Ethereum. They, therefore, expect LTC to outperform BTC in mass adoption in the long run, a fete that will ultimately push LTC prices to astronomical heights.
Read More: Is Litecoin a Good Investment?
How Much Should I Invest in Litecoin?
The question of how much you should invest in Litecoin is relative. It depends on such factors as your disposable income, investment goals, and experience in crypto trading.
For example, high-income earners with minimal responsibilities have a certain level of freedom that allows them to invest significantly in cryptocurrencies like Litecoin. Similarly, if you are an experienced crypto investor with a high level of understanding of price volatilities and risk management, you could also consider dedicating a substantial portion of your capital to LTC investing.
Litecoin goal investing must be accompanied by thorough and accurate research, sufficient risk controls, and matched with appropriate investment. Let us, for instance, assume that your goal is earning a million from Litecoin investing in the next five years.
You start by conducting thorough research about LTC’s future price performance and the possible value of one Litecoin in 2026. Then, if your analysis indicates that one LTC coin will be worth $1,000 by this time in 2026, proceed to make a $192,000 Litecoin investment today – approximately 1,200 LTC coins.
But whether you are goal investing, an experienced crypto investor, or a high-income earner, how much you invest in crypto should fall within the dictates of the investment rule of thumb – do not invest more than you can afford to lose.
Check Out: 15 Reasons Why You Should Invest in Litecoin
How Much Could Litecoin Be Worth?
Different Litecoin investors and crypto industry analysts have varied views on LTC’s future price performance. Some believe that its value will rise above $1,000 before the end of the year, while others believe it will only reach this coveted price level years later.
Analysts at Coinpedia are conservative about Litecoin’s future price performance. They expect the Litecoin altcoin to reach $524.45 by the end of 2022, and $980.78 within the next five years.
Wallet Investor’s technical analysis indicates that the value of Litecoin may reach $282 in one year and go on to reach $674 in the next five years.
Analysts at Coin Price Forecasts are more optimistic about LTC’s future price performance and expect the Litecoin altcoin to reach $195 before the end of the year and rise above $656 within the next ten years.
Cryptocurrency Price Prediction, a website that uses fundamental and technical analysis to forecast the price of Litecoin digital assets, predicts that Litecoin may reach $936 by March 2025, $1,824 by December 2025, and $3,965 by December 2030.
Should You Invest in Litecoin?
All investments, Litecoin notwithstanding, are risky. But several factors make it a must-have for your crypto investment portfolio. For instance, it has an overall ROI of over 3,005.05%.
Analysts and investors have also lined up multiple reasons why they believe LTC prices will continue soaring for the next few years. Case in point, they believe Litecoin is massively undervalued. They also believe LTC will overtake Bitcoin as the preferred currency for payment processing and cross-border payments.
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Virtual currencies are highly volatile. Your capital is at risk.
- Litecoin has an overall ROI of 3005.05%.
- Crypto analysts and Litecoin investors are convinced that LTC prices will continue soaring for the next few years.
- How much you invest in Litecoin should be determined by your goals, amount of disposable income, and crypto investing experience.
- Litecoin recently set an all-time high price of $412.96, but also fell off the list of the ten largest cryptocurrencies based on market capitalization.
- Most crypto analysts expect Litecoin prices to rise above $1,000 in the next ten years.