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How to Invest In Litecoin In 2021

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Litecoin (LTC) was created in 2011, making it one of the first cryptocurrencies after Bitcoin. It aims to serve the same purpose as Bitcoin, which is enabling peer-to-peer transactions, but it differs in several ways. It's four times faster in processing transactions, has four times the number of coins, and uses a different hashing algorithm. 

Litecoin has managed to maintain a top ten status within the crypto market for the majority of its existence. The Litecoin price has grown by more than 5x over the past year, and this trend is expected to continue. This piece will guide you on investing in LTC, helping you make the most of the opportunities it offers.

4 Ways to Invest in Litecoin

There are many ways to invest in Litecoin. This section will cover four different options depending on the objectives you are trying to achieve. Each strategy offers different results, and which one you choose will depend on your overall goal.

1. Buy Litecoin Through an Exchange

The first step you need to take before investing in Litecoin is acquiring a wallet to secure your digital assets. Different types of cryptocurrency wallets exist, including software wallets and hardware wallets. Both help secure your private keys safely, thereby ensuring you can stake a claim on a given bunch of coins that exist within the blockchain.

Software wallets exist in the form of websites, desktop, and mobile applications. They are easily accessible and ideal for traders and people who want to make regular transactions without inconveniences. However, they are less secure compared to hardware wallets since they are mostly connected to the internet. Examples of software wallets include Coinbase, Atomic wallet, Edge, and many more.

On the other hand, hardware wallets are devices that resemble USB flash drives. They store your private keys offline, making them the most secure mode of holding digital assets. Ideally, it would help if you used these kinds of wallets to store large amounts of a given cryptocurrency that you don't plan to touch anytime soon. Examples of great hardware wallets today comprise those from Ledger, Trezor, and a few other companies. Once you have secured a hardware wallet, now join a reputable exchange and buy Litecoin (LTC). 

Register an account and verify it by going through the Know Your Customer (KYC) process. You will have to upload a photo of your ID/passport, some proof of address, and a selfie. Then proceed to fund the account and purchase LTC.

Our Recommended Exchange

This section will show several crypto exchanges where you can purchase LTC with ease. Our research team has put in the work to come up with a list of highly reputable platforms with an excellent track record over the years they have existed.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Wire Transfer, Bank Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Litecoin Through an Exchange

Currently, a single Litecoin costs around $190. The good news is you don't have to buy a whole Litecoin if you can’t afford it! You can buy small fractions of the coin and grow your portfolio over time. One LTC can be broken down into 100 million Litoshi, which is the smallest quantity of the coin. This means it's possible to own an amount of LTC worth just $1.

Most crypto exchanges have minimum limits on the amount you can purchase, including network fees, so it is safe to assume the smallest quantity you can buy is $10 of LTC. No matter how small your investment is, you can grow your portfolio slowly over time with a concrete plan. To put your plan in motion, you simply need to sign up on an exchange, verify your account, fund it, and start buying.

3. Trade Litecoin Through a Broker

Brokers are great for traders that don't want to handle the coins themselves. For the average investor, the process of owning and securing a crypto asset can be daunting. Cryptocurrency brokers offer users an accessible way to trade LTC and other cryptocurrencies, as they hold your coins for you.

Brokers also offer financial instruments derived from coins like LTC. Such products include a contract for difference, or CFD. CFDs allow the trader to profit from the volatility that characterises crypto markets by speculating on whether the price of Litecoin will rise or fall. Thanks to a mechanism called leverage, your capital can receive a boost from the broker, thereby increasing your exposure for a trade. This can greatly increase your profits if used correctly, but also increases your risk.

Our Recommended Broker

Here you will see a list of some of the best brokers that allow you to trade financial instruments linked to Litecoin for the best returns with fewer security risks.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA

4. Invest In a Litecoin ETF

Exchange-traded funds (ETFs) are just that - funds traded on the stock exchange. These can be made up of just one asset, such as Litecoin, or many different assets of different types. Being listed on the stock market requires extensive vetting, and the heavy regulation required makes ETFs a great investment for people who are concerned about security, scams, and fraud.

Multi-coin ETFs that contain Litecoin allow you to spread your investment risk across multiple crypto assets. If Litecoin doesn’t generate the returns you had hoped for, then the logic is that the other coins in this ‘basket’ will make up for these losses. ETFs are carefully selected by experienced fund managers and offer a fantastic option for investors who are unsure of market conditions or don’t have the time to do extensive research.

5 Litecoin Investment Strategies

The section below will cover five of the most common strategies you can use to invest in Litecoin today. They will offer different results, and it's up to the investor to decide what they are trying to achieve and to choose the strategy that suits their needs best.

1. Buy and 'Hodl'

What is it?

‘Hodl’ is a term that comes from a Bitcoin forum, where a user misspelled ‘hold’ during a rather amusing rant. The term now refers to the strategy of buying a coin and holding it for the long run. Based on our experience so far, the price of LTC has tended to rise over time. When the token launched in October of 2011, it was trading for a few pennies. Today it trades for around $200. 

As mentioned earlier, Litecoin allows for fast transactions, and this has seen it embraced by several merchants around the world as a payment method. As crypto consciousness grows among the masses, expect to see LTC embraced by even more people. This should push its price even higher. Based on this narrative, the current price may seem cheap as a long term investment.

What is the benefit of using this strategy?

There are several advantages of using this strategy to invest in Litecoin, such as not worrying about the daily swings in the asset's price. If you are holding for the long run, these won’t worry you, as they are dwarfed by the potential final returns. Buying and holding is also the most straightforward investment strategy, and doesn't require technical know-how to go about it. By engaging in this strategy, you won't have to worry about missing out on the long-term gains of LTC.

2. Day Trading

What is it?

Day trading is a strategy that involves opening positions on the market before liquidating them shortly after to generate profits. It's an excellent strategy for individuals who want to take advantage of the Litecoin market's inherent volatility. Leverage can also be used to amplify gains on small price movements, but be careful as this also adds another layer of risk to your trades.

One technique day traders use is to wait for LTC to fall below its ‘trend price’, purchase it, and wait for the price to recover before selling. This strategy is very effective, but requires you to keep tabs on the movements of the crypto market. You also have to know how to conduct technical and fundamental analysis to ensure you time the market correctly. 

What is the benefit of using this strategy?

The perks of this strategy include not having to worry about holding LTC and storing it in wallets - brokers will hold the coins for you, and you can also use CFDs to speculate on the price. You get to profit on small price movements daily, meaning that you can see returns much more quickly than you would if ‘hodling’. Some platforms even allow you to copy expert traders and get similar results.

3. Shorting

What is it?

Do you believe that the price of Litecoin is going to fall? If so, then short-selling (sometimes called shorting) is the right strategy for you. A broker will lend you a quantity of Litecoin, like 1 LTC. You sell this on the market right away at the spot price, currently around $190. Later this year, the price of LTC has fallen, and you can buy back 1 LTC for just $100 of the $190 you have from the first trade. You go back to the broker with 1 LTC, clearing your debt, and you get to keep the $90 difference. 

What is the benefit of using this strategy?

Shorting is a perfect strategy for a ‘bear market’, a term used to describe unfavourable market conditions. If you are ‘hodling’ Litecoin during a bear market, you can use short-selling to earn a good return even when your main investment is depreciating in value. Shorting should be used with caution, however, as you will incur losses if the price goes up rather than down.

4. Using a Trading Bot for Trading

What is it?

The growth of the cryptocurrency market has seen the rise of trading bots tailored to aid traders in handling the many aspects of trading the market. An LTC trading robot will ease the trader's burden since it will collect large amounts of data from the crypto market, decipher it, and make predictions on the likely direction the price of LTC will take. 

You can even instruct the bot to place trades for you. Bots can do this through the use of sophisticated algorithms, buttressed by artificial intelligence and machine learning. All you need to do is sign up with a reputable bot, fund your account, and let the robot conduct the trades for you with ease.

What is the benefit of using this strategy?

Robots offer the most straightforward way for everyone to enter the crypto market and earn profits from trading. You don't need to have prior knowledge of crypto trading to make the most of digital assets such as LTC. If you are a novice trader, a successful bot will offer potentially higher returns than your first foray into the market, and allows those with limited time to benefit from the quick profits offered by trading. 

Only a small amount of time is needed to periodically adjust your bot’s strategy, and then the bot makes trades around the clock. 

5. Hedging Litecoin

What is it?

Hedging is a trading strategy that allows you to cover potential losses from another position. This is possible by combining CFDs, shorting, and futures to hedge your investment. A CFD position in the opposite direction of your Litecoin investment will ‘hedge’ your investment, reducing your potential downside. Hedging can also be achieved using futures contracts, which allow you to fix a future sale price for your Litecoin.

What is the benefit of using this strategy?

Hedging your Litecoin investment allows you to secure your capital. This ensures your initial trading position doesn't result in large losses on your side. This strategy is a must for investors who are conscious of the volatility and unpredictability of crypto markets, and want to limit their potential downside while simultaneously maximising returns.

Buy Litecoin Today!

What to Consider Before Investing in Litecoin

So far, you have learned how to get started with investing in Litecoin and the many strategies you can use. However, before you can begin your journey, you need to consider a few factors to ensure your venture will be successful.

Fees

Litecoin was designed to have lower network fees than coins like Bitcoin, but large transactions at peak times may cost several dollars. Cryptocurrency trading platforms also charge for their services, so if you intend to trade regularly, be aware that recurrent fees can take out a chunk of your profits.

Brokers will not charge network or transaction fees, but there are commissions and other costs such as deposits and withdrawal fees. There may also be costs associated with the payment method you choose to use to fund your account as well.

Risks

As with any investment, there are risks attached to Litecoin. Just like the entire crypto market, LTC is highly volatile, and prices can change dramatically overnight. Many find this alarming, and may benefit from managing their risk using the hedging techniques mentioned in this guide. 

Authorities around the globe are yet to come up with adequate regulations that govern cryptocurrencies. As such, due diligence is crucial before investing to avoid falling for scams, and ETFs provide a regulated entry point for wary investors.

Always avoid people promising to invest on your behalf, as well as schemes guaranteeing profits with zero risk, and lastly secure your accounts and wallets properly to protect yourself from hacks.

Payment Methods

Before joining a given platform to invest in Litecoin, you have to consider the payment modes supported. This can make or ruin your investment experience. A great platform should offer various ways to allow you to make your investment, such as using cash, bank transfers, credit/debit cards, e-wallets, third-party payment modes, and even other cryptocurrencies.

Why Invest in Litecoin?

There is a lot of buzz around cryptocurrencies today. Digital currencies are seen as the future of money, and we are still at the beginning of this revolution. Cryptocurrencies are decentralized, which makes them censorship-resistant. When you own Litecoin, you control your funds and can use them as you please. Thanks to increasing demand, the value of these assets keeps growing with time. Litecoin has existed for less than 10 years, and in this time has produced an ROI of over 4000%. Very few asset classes, if any, can match that kind of performance. Expect this return on investment to grow as masses embrace digital assets more and more.

Summary of Investing in Litecoin

Judging by the rate the cryptocurrency market is growing, the best time to invest in Litecoin seems to be  today. Don’t just take our word for it: conduct research of your own and see how the market for coins like Litecoin has grown over the last ten years. This guide outlines all the ways you can invest in Litecoin and the perks you stand to gain with each strategy. By heeding this advice, you should be in good stead as you start your investment journey.

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