Is Litecoin a Good Investment?
Litecoin (LTC) after its creation in 2011 was supposed to be the next safe haven for investors. The crypto asset has been touted as the silver to Bitcoin’s gold and has performed awesomely within the years, achieving new all-time highs of $412.96 in 2021 after trading for as low as $1.11 in 2015.
With competing digital assets Bitcoin (BTC), Ethereum (ETH) and Binance Coin (BNB) hitting new all-time highs in February 2021, coupled with other altcoins such as Ripple (XRP) providing software solutions which is helping bridge the gap in cross-border payments, does Litecoin stand a chance of soaring to new all-time highs?
Will the digital coin be able to finally achieve its status as the second cryptocurrency of choice by investors after Bitcoin?
Litecoin (LTC) is one of the oldest cryptocurrencies in the market, but for some reason, it has not been able to obtain the same hype status that other digital assets such as Ethereum and Binance Coin (Decentralized Finance protocols) and Ripple (XRP and RippleNet) have been able to achieve in the crypto trading space.
Litecoin (LTC) is a good investment because it has high transaction speed, low transaction costs and fast confirmation time. As one of the earliest altcoins in the cryptocurrency market, the crypto asset saw an increase in its popularity by rewarding miners and investors alike.
One of the main factors which have seen its popularity soar in recent times is that, although it marketed itself as the secondary Bitcoin (BTC), it has been able to find its own identity which has resulted in its unique features.
The average transaction time of Litecoin (LTC) takes just 2.5 minutes to complete when compared to its elder crypto sibling BTC which takes ten minutes, according to Blockchain.info.
Such speed for a coin which relies on blockchain technology is awesome news for several merchants globally which require instant micro-payments to be completed for their business operations. The average transaction fee for the token is 0.00015 LTC which corresponds to $0.028 according to data retrieved from Bit Info Charts compared to $22.13 for Bitcoin which was sourced from YCharts.
What has made it possible for Litecoin to have such transaction speeds is attributed to its cryptographic algorithm. After trying to lean on parent crypto BTC in terms of features and functional capabilities, the digital asset came to the utmost realization that the issue of scalability is the primary challenge for the use and extensive adoption of blockchain technology by several individuals and business organizations.
As a result, LTC has become different and has found its own solution to transaction speeds, opting for the newer algorithm SCRYPT after using the longstanding algorithm of BTC (SHA-256) for a great period of time.
The main practical significance of these different algorithms is their impact on the process of “mining” new coins. SCRYPT was designed with the intention of providing a system which does not have to fall into the demands of custom hardware solutions which are employed in Application-Specific Integrated Circuits (ASICs).
It is a known fact that both BTC and LTC require a substantial computing power when confirming transactions.
With the SHA-256 algorithm, everyday users of personal computers cannot become a part of a coin’s miners. This is because the hardware system was tailor-made for the mining of Bitcoin (BTC) and the only way anyone can become a miner is to get the hardware system or join a mining pool.
According to Jake Frankenfield of Investopedia, the difficulty in using SHA-256 algorithm “Has led many commentators to view scrypt-based cryptocurrencies such as LTC as being more accessible for users who also wish to participate in the network as miners”.
A good portion of Litecoin mining is still done via the usual Central Processing Units and Graphic Processing Units (GPUs) which is more affordable for use by all manner of persons and helps in the swift confirmation of transactions.
Litecoin (LTC) has a long, projected growth which is strongly backed by Crypto Research Report Group which is of the belief that moving from consensus algorithm to a faster processing and confirmation time will see Litecoin trade at a price of $1,200 by 2025 and $2,250 by 2030.
In terms of measuring the capacity of other altcoins, Litecoin relatively has a bigger market capitalization and trade volume.
Market Capitalization is important because it reflects what investors are willing to pay for an asset and the market’s perception of its future prospects.
Trade volume also helps you as an investor to identify momentum in a particular asset and confirm a trend. If the volume increases or is maintained daily, normally, prices tend to follow in the same direction.
While trading volume is not the only tool, it adds invaluable insights into your investment decision. As Dan Moskowitz of Investopedia puts it “Logically, when more money is moving a stock, crypto, commodity or metal, it means there is more demand for that asset”.
At the time of writing this feature article, the current price of Litecoin (LTC) was trading at $183, having gained 1.12% in the last 24 hours. LTC has a market capitalization of $12.6 billion with a circulating supply of 68,723,745 LTCs and a trading volume of $3.008 billion.
Such trade volumes have been made possible as a result of the digital assets availability on all the major cryptocurrency exchanges and brokerages globally. This offers several benefits such as the coin being readily available for purchase by new investors without the complexity normally associated with finding assets and investing in them.
Another benefit can be attributed to the crypto asset being available on more exchanges means that more LTC can be converted into cash easily. This increases the tokens liquidity which is extremely essential for cryptocurrencies. Evidently, Ripple thrives on higher liquidity to be able to survive its on-demand cross-border payment solutions.
As a result of being one of the earliest coins on the market, LTC has already established a positive reputation in the crypto market space.
Prime XBT believes LTC can reach a potential high of $750 in 2021, $2,250 in 2022, revert back to $1,000 in 2023 and a huge price milestone of $10,000 by 2025.
YouTuber and Founder of Crypto Capital Venture, Dan Gambardello has compared LTCs price action in 2016, where the coin consolidated at $4 for some time and rallied to $300. He believes that LTC will soon consolidate at $70 before a massive run of more than $1,000 in the long-term.
Litecoin is relatively cheaper than other competing cryptocurrencies.
Inasmuch as an asset’s trading price does not have an instant effect on the percentage gains which can be earned by investors, it is relevant. Prices of stocks, commodities, metals and cryptocurrencies thrive on major factors which include positive press, patronage by regular people and more importantly the forces of demand and supply.
At $183, investing in 10 LTC will set you back at most $2000; the same cannot be said of the other competing digital coins. It must also be remembered that LTC has a maximum supply which makes it an asset that can become scarce.
Scarcity is an important part of demand and supply. Once it becomes scarce and more people demand it, prices will go up since many holders will be willing to sell it for a higher price and buyers will be willing to purchase it at whatever price that sellers want.
This will shoot the price of LTC to new wavelengths and see it make enormous gains for new and expert investors. Litecoin market cap puts the asset under the category of high-capped assets as its market cap is above $10 billion.
LTC is a great asset you cannot miss and it would brighten up any portfolio.
Coin Forecast predicts that with higher demands for crypto as a safe haven, Litecoin as at the year ended 2021 will be trading at a price of $224.
In the next few months, new users will definitely get involved as a result of the increase in patronization of cryptocurrencies due to decentralized finance (DeFi).
Seeking instant gratification and higher profits despite the high volatility of digital coins, Litecoin (LTC) as an undervalued coin could become extremely profitable than other crypto assets in the next uptrend.
What is Litecoin?
Litecoin acts as a medium of payment by serving as a digital peer to peer payment system which makes it easy for the execution of transactions and as well used in the exchange of goods beyond borders.
The cryptocurrency uses blockchain technology and this makes the ease of transferring funds directly between individuals and business organizations effective.
Blockchain ensures that Litecoin can be used as a decentralized payment system that is mined and released under MIT/X11 license which is free from any censorship or central government control.
The ticker symbol of Litecoin is LTC and it’s currently trading a price of $183.
Litecoin employs a consensus algorithm called SCRYPT. SCRYPT makes it possible for more individuals (users) to confirm a transaction by using the central processing units (CPU) and graphic processing units (GPU) of their personal computers.
This upgrade has made it possible for the swiftness of transactions and confirmation which is completed within two and a half minutes.
Who Created Litecoin And When Did It Start Trading?
On 7th October 2011, Google employee who later became an engineering director at Coinbase, Charlie Lee, released Litecoin (LTC) via an open-source client on GitHub.
Originally, a source code of the Bitcoin Core client, Litecoin differs in terms of increased maximum number of coins, decreased time with regards to block generation (2.5 minutes), a slightly modified graphical user interface (GUI) and a different cryptographic algorithm of SCRYPT instead of the long-standing algorithm (SHA-256).
Born in Ivory Coast, Charlie Lee is a computer scientist, who currently serves as the managing director of the Litecoin Foundation and has been working for Coinbase since July, 2013.
After working for Google and being part of the team responsible for the code writing of Chrome OS (proprietary software designed by Google with the web browser, Google Chrome, as its principal user interface), he developed an extensive interest in Bitcoin.
He used his spare time during his time working at Google to write the blockchain technology using BTC as a primary template. Lee later released Litecoin to the general public after being able to mine only 150 coins.
In an interview with TechCrunch, Lee stated that “He created LTC to be used for smaller transactions and had no intention of using the digital coin to compete with BTC”. Lee left Google and currently works for the cryptocurrency exchange which adopted his coin, Coinbase.
The Network of Litecoin went live on 13th October, 2011.
Why Was It Created?
The primary purpose for which the digital coin was created is to help provide a digital currency which can be used for conducting transactions easily and more efficiently in our daily activities.
Additionally, Litecoin (LTC) was also created with a goal of prioritizing the speed and costs of transactions (increase speed and low costs) which so far has been invaluable to the coin’s adoption and has seen it grow in popularity among fans of decentralized finance (DeFi) and the whole crypto space.
Where Was It Created?
The idea was conceived and executed in the United States of America. Founder Charlie Lee benefited enormously from his bachelors and masters degrees in Computer Science from Massachusetts Institute of Technology in the year 2000. Litecoin Foundation (a non-profit organization) is registered in Singapore.
Litecoin has a digital address (website) which has seen developments over the years with its current development coming up in 2018 which can be found here.
How many Litecoin Are in Supply?
The maximum supply of LTCs stands at 84,000,000 with a current circulation supply of 66,588,325LTC which represents 79% of maximum supply.
Litecoin: Will It Be a Good Investment in 2021?
Litecoin looks like it is going to be a good investment in 2021 as per news and analysis sourced from credible crypto outlets.
Litecoin may have lost its position as the second cryptocurrency of choice by traders and investors but it has not lost its relevance and usefulness in the crypto finance world.
The fact that Litecoin (LTC) has been able to cement a formidable relationship with the Miami Dolphins which announced LTC as its official cryptocurrency means there is a huge potential for the asset in terms of institutional adoption.
Payments giants PayPal Inc. added LTC to its options of payments in October 2020 and other firms across Information Technology, car rentals, hotel bookings and flights, video games and clothing have integrated LTC with their merchants boosting the coin’s growth in the business environment.
Such huge patronage will result positively in the price of the digital coin which will reflect in the gains of investors.
This makes Litecoin a valuable asset to have on your portfolio of investments.
Wallet Investor is mostly known for its conservative forecasts. Litecoin (LTC) seems to have given analysts a lot of hope for the future, as they believe the digital coin will by the end of 2021, rise up to $290 which makes it a great investment for the long term.
Litecoin’s future looks extremely bright as a result of the partnerships as well as all the integrations by merchants. The digital coin may rise upwards and may give a tough competition to the other competing cryptocurrencies, are the words of analysts on Coin Switch.
In a statement, the largest cryptocurrency exchange said “Litecoin might reach $600 by the end of 2021; it might reach new heights and shall define its futuristic goals''.
According to Digital Coin Price, the crypto asset will increase throughout the year. Analysts on the website have liaison with other experts and fans of decentralized finance (DeFi) and the response so far has a bullish aura around it.
The crypto website which provides accurate crypto market analysis and data believes Litecoin will touch the $268 price milestone by the end of 2021.
The coin has started to escalate dramatically although it started the year with a trading price of $132.32. With certain collaborations and integrations, the digital asset can enrich its platform which could see it soar to new heights, are the bullish words coming from CoinPedia.
Analysts from the FinTech and Cryptocurrency News Media are of the belief that the crypto coin by the end of 2021 will be trading at a price of $360.
Another bullish price has been forecasted by CoinPedia heading into 2022 where LTC will start the year strongly at $204 and end the year with a new all-time high and price milestone of $524.
In the year 2025, the crypto news media still believes the coin would have been adopted by several merchants to be used in digital payments and as a result have a positive outlook of the currency’s performance in the next 5 years. “Litecoin will be trading at a highest price of $980 by 2025”, analysts added.
So, Is Litecoin a Good Investment?
Most investments especially in crypto investing boil down to the factor of “risk versus reward”. Do the potential rewards outweigh the possible consequences of the risks?
Put simply, Litecoin is low-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding it to your portfolio.
Litecoin is relatively different in terms of supply. While many altcoins are in the billions in terms of supply, LTC has a finite supply of 84 million with a little over 68 million LTCs mined.
This means demand for the asset is going to exceed supply in the not-so-distant future when the maximum supply of coins is mined.
This makes LTC one of the greatest cryptocurrencies out there with huge market potential as it makes use of the laws of economics.
Aside this, LTC is highly patronized by asset management firms such as Grayscale which made a $30 million investment in the asset in February 2021.
Such trust and confidence in the coin by well-established investment companies means that more business organizations will opt for LTC as its primary cryptocurrency.
Huge adoption always results in high prices in the long term which makes LTC an asset worth your money in terms of investment.
A huge influx of investments from credible organizations always sees prices of assets go up proportionately. Bitcoin’s (BTC) February, 2021 surge was down to Elon Musk and Tesla Inc. making a $1.5 billion purchase of the coin and also adding it to its options of payments to make it easy for users to purchase Tesla related products.
News coming in from CoinPedia in an article published on March 3, 2021 reports that Grayscale’s Litecoin Purchase Accounts for 80% of February’s Total Mining.
Grayscale Investments is the largest cryptocurrency asset management firm and Litecoin’s twitter handle posted on the first day of March, 2021, that “In the past month, @Grayscale Trust has purchased over 174,000 LTCs. Such a number is represented by $30 million in fiat currency.
The company also has investments in other cryptocurrencies such as Ethereum (ETH), Bitcoin (BTC) and Stellar Lumens (XLM). Grayscale is poised to include other altcoins in a highly invested portfolio of assets in order to hedge their bets. Overall, only 7,200 LTCs can be mined daily and the total coins mined in February is 201,600.
If this rate of demand increases, Charlie Lee’s vision of seeing Litecoin spike in price will soon be achievable. Litecoin ended February, 2021 with a trading price of $176.07 after starting the month with a trading price of $142.16. Grayscale’s investment has had an effect on its price as LTC has been trading between $170 and $199 in the beginning of March, 2021.
Supply is another factor which drives the price of Litecoin. Mirroring Satoshi Nakamoto’s creation in every possible way, Charlie Lee ensured that there is a finite number of Litecoin which would be available for mining. Currently, there are only 84 million coins which can be mined and a little over 66 million coins have already been mined.
Several years ago, it looked like the maximum supply of LTC will never be attained, currently; it is just a stone’s throw away from moving from its current supply of 79% to a 100% in the next few years ahead of us.
Once the total mining of LTCs have been achieved, there will certainly be scarcity of the coin as a resource. The principles of economics will take hold of the digital asset where demand will exceed supply and the price will shoot up substantially and make Litecoin a great investment in the long term.
Analyst Lorenzo Stroe of FXStreet believes in future bulls for this asset. It is a known fact that LTCs price is still down by 30% since its 2021 peak of $247.
According to the analyst, “The cryptocurrency market is showing signs of a recovery, and Litecoin bulls are planning to take advantage of it. Litecoin will hit $260 in the near future because investment whales will soon go into a buying frenzy”.
Don't Miss: Pros and Cons of Investing in Litecoin
Litecoin in Comparison to Other Altcoins
As an investor, it is extremely important for you to compare an asset of interest or choice with competing assets. This helps you in getting to know a coin's rank in the market and its potential market value if all boxes such as total market supply of coins have been ticked.
LTC has several competitors and one of them is Ethereum (ETH).
Ethereum is the second (2nd) most popular and second largest crypto by market capitalization, although LTC came into the blockchain space two years before the “king of decentralized finance’s” inception as a tradable digital asset.
As at the time of writing, Ethereum (ETH) has a circulating supply which is the same as its total supply of 117,880,683.69 ETH.
Cardano (ADA) is the third largest cryptocurrency by market cap. The digital asset has a circulating supply of 32,025,787,327 ADA, with a trade volume of $2,199,906,460 in the last 24 hours.
DogeCoin (DOGE) is the tenth largest cryptocurrency by market cap. The crypto asset has a circulating supply of 131,651,445,235 DOGE, with a trade volume of $1.68 billion.
Stellar (XLM) is the twenty-second largest cryptocurrency by market cap. The digital asset has a circulating supply of 23,862,599,364 XLM with a trade volume of $617,981,003.
Ripple (XRP) is the sixth largest cryptocurrency by market cap. Thriving on its token XRP and RippleNet (Network) to help provide software solutions to bridge the gap in cross-border payments, Ripple (XRP) is currently trading at $1.17, with a circulating supply of 46,805,773,456 XRP, with a trade volume of $4.59 billion.
With a trading volume of $3,003,940,540, a circulating supply of 68,723,745 LTC and a market capitalization of $12.6 billion, Litecoin is the fifteen largest cryptocurrency by market cap and has a huge potential for growth.
Do not forget that market capitalization is the price of an asset multiplied by the number of shares (in this case, coins) outstanding. If every coined is mined and Litecoin hits the $300 price milestone in the not-so-distant future, its market capitalization would be ($300×84,000,000), which equals $25.2 billion.
At a trading price of $400, LTC market cap will be $33.6 billion and at a trading price of $500, the silver of cryptocurrency would have a market cap of $42 billion. Such a figure will put Litecoin into the spotlight as one of the most popular and largest cryptocurrencies in the financial markets.
Coin Switch believes such trading prices are attainable. The cryptocurrency exchange believes 2023 will see Litecoin Reward Halving. Until August, 2023, miners of LTC will continue to be rewarded with 12.5 new LTCs for every block they process. Halving the block means the new reward will be cut in half to 6.25 LTCs.
According to Coin Switch “This would push enthusiasts of LTC to trade and invest as the halving process takes shape as this enables the coin to surge in value. Overall, the asset might even shine ahead of its peers and become one of the most traded cryptocurrencies”. By 2025, “LTC might be trading at a price of $1,200”, analysts at the cryptocurrency exchange added.
Litecoin (LTC) Price Prediction in 2021 and Beyond
Lead Analyst of FX Leaders, Skerdian Meta forecasts that the price of LTC will go up with driving factors such as the second wave of COVID-19, technical pullback as well as a safe haven retreat. He forecasts the coin to end 2021 trading in the price range of $350 to $400.
Looking into the future, the lead analyst also sees a Post COVID-19 recovery; hawkish central banks, USD reversal and a positive risk sentiment will continuously drive the crypto asset up. According to Meta, “Litecoin will be trading at a price range of $500 to $600 in 2022.
Economic recovery, positive market outlook as a result of the gradual eradication of COVID-19, tighter monetary policies and higher bond yields will see the soar to new heights and will be trading in the price range of $1,000 to $2,000 by 2025.
According to the Economy Forecast Agency, Litecoin could rise to a new peak of $261 at the start of January 2022.
Capital.com believes that as a matter of speculations, several forecasters place the price of LTC to soar and trade in the range of $210 to $270 between the end of the second quarter through to the end of September 2021.
Crypto-Rating, opines that Litecoin is “A bi-product of science and innovation, LTC has both short-term rally as well as long-term potential. LTCs price as at the year ended 2021, may reach $200.39”.
Crypto NewsZ, believes the coin has a great future and has been marginally affected by competing digital currencies, but bulls will come back and price may skyrocket to $210.88 in the long term.
Check Out: Litecoin Price Prediction 2021-2025
How Do I Invest In Litecoin?
After doing a thorough research of an asset (fundamental) and following technical analysis news on several investment websites, you may have been asking yourself, where you can trade despite the volatility of cryptocurrencies.
At Trading Education, we believe eToro offers the best service in terms of authenticity, scalability and security.
The first step is to sign up.
Provide details about yourself (full legal name, email address, residential address),
Go through a verification process called Knowing Your Customer (KYC). You will be asked to provide government-issued ID cards (driving license, passport, national IDs).
Internet bills, bank or credit statements that are not more than six months old will also be asked in order to confirm your billing address.
Deposit funds (USD, EUR and GBP) to aid the purchase of your coins.
Navigate to the Litecoin page, purchase your first LTCs and it will be processed and added to your account.
eToro – Best Platform to Buy Litecoin
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
Is Litecoin A Buy in 2021?
Like all investments, investing in cryptocurrencies is an extremely risky adventure you must be cautious of. Litecoin (LTC) has been around for a long time and its number of maximum coins might offer a psychological advantage over BTC and other altcoins, due to its smaller price as of yet for a single unit.
Through the Litecoin Foundation, the crypto asset has formed partnerships with elite corporations such as Miami Dolphins of the National Football League in the United States which uses LTC as their official cryptocurrency.
Travel website, Cheapair.com, provides a range of services from car rentals, hotel bookings and flights and accepts LTC as a form of payment.
Others such as Crypto Games, Snel.com and travel agency have included BTC in their payment options.
The biggest news for Litecoin in terms of adoption came in the month of October, 2020 when online payment giant (PayPal Inc.) added the coin onto its options of payments.
There are several business organizations that have made plans to adopt decentralized financial solutions to their impending operational problems. Unfortunately, scalability has been the primary obstacle which made this difficult.
Blockchain technology provides numerous opportunities for efficiency and effectiveness of business operations but slow processing speeds has slowed its adoption. Fortunately, LTC seems to have found a solution to this with its new SCRYPT algorithm which has seen the number of merchants increase as it is a relatively cheaper and faster alternative to other altcoins.
With continuous adoption by several established organizations, price and market value will surely go up and bring huge gains to holders of the asset.
As Coin Price Forecast predicts, the future looks good and “Litecoin could end 2021 with a trading price of $224 and for the year ended 2030, have a trading price of $643”.
Read More: How to Invest in Litecoin