Litecoin Trading: A Brief Guide for Beginners

Litecoin (LTC) is one of the oldest and most popular cryptos on the market. It is often called "digital silver to Bitcoin’s gold", and for good reason. On the technical side, both cryptos have a lot in common but LTC is a lighter and more affordable alternative. To assess its profit potential, read our brief Litecoin guide explaining how this asset works and what its value stands on.

At the time of writing (Aug 2021) Litecoin’s market cap is well over $11 billion. The price of 1 LTC is around $160, but it keeps bouncing up and down, providing traders with excellent profit opportunities.

Going to trade on LTC using the Olymp Trade platform? Before you start, have a closer look at this crypto that once was ranked 2nd by market cap. Now, this position is occupied by Ethereum (ETH), Vitalik Buterin’s crypto described in a separate article. Okay, let’s start with some history.

Creating Silver from Gold – How LTC was Launched

LTC is a hard fork of Bitcoin, meaning Litecoin’s developer used the source code of the Bitcoin blockchain. The new coin was launched in 2011 by Charlie Lee, a computer scientist and a famous crypto influencer who is now the Managing Director of the Litecoin Foundation. Unlike most emerging cryptos, the new project sought to complement and not to challenge the market leader. As the name suggests, the idea was to create a lightweight version of BTC that was more convenient for everyday payments.

Until December 2017, Lee was also one of the most prominent LTC investors. He then decided to sell or donate nearly all his holdings to avoid a conflict of interest as some people accused him of pumping his own coin through his tweets.

Interestingly, this decision made many crypto investors believe that Litecoin’s creator was no longer confident in its long-term success.

Similarities & Differences Between BTC and LTC

Both Bitcoin and Litecoin are financial tools that enable people to send/receive money over the Internet. They stand on the same values (transparency, decentralization, security) and the same source code. Both cryptocurrencies can be divided into much smaller units (Satoshi and Litoshi), making them more affordable for investors. Both have a capped total supply, meaning the number of coins that can ever be in circulation is limited. Finally, both coins are issued through the Proof-of-Work (PoW) mining method. At the same time, Litecoin relies on a more eco-friendly algorithm that wastes less energy and doesn’t require any powerful and pricey hardware.

So, what exactly makes Litecoin lighter than its parent? For a non-tech user, there are three main differences:

What do these tech specs mean to an everyday user?

Compared to BTC, Litecoin is much faster and cheaper to use. Also, its network is more scalable meaning that it is capable of processing more transactions per second. While BTC is better for storing/moving big amounts of money, LTC is a light-duty coin that is better suited for buying a cup of coffee. Yet, you should keep in mind that few merchants accept LTC as payment, so the coin’s utility is still limited.

Should You Trade Litecoin?

Litecoin has been around for a while, and it’s one of the market’s all-time favorites. Right now, LTC doesn’t rank among the Top 10 cryptos, but it’s still one of the largest altcoins by market cap and trading volume. Hence, Litecoin is considered a highly liquid asset. Very few of the more than 4,000 cryptocurrencies on the market can make this claim. To sum it up, LTC is a good choice for a trader. Like most altcoins, it is very volatile compared to traditional assets.

Below is an example of Litecoin’s price dynamics over the past four months (May 2021 – Aug 2021).

The traders who did the right thing at the right time made multiple profits. In 2021, the price swings are still big, and are very inviting for those who want to take advantage of them.

How and Where to Trade on Litecoin

Litecoin is one of the crypto assets available on the Olymp Trade platform. You can trade LTC in both the Forex and Fixed Time Trade modes:

As always, we recommend newbies to practice on a demo account. It will help you gain experience with crypto without putting your capital at risk.

Factors that Influence Litecoin Prices

As you probably know, most cryptos are very volatile. LTC is no exception here. How can you forecast where the price will move next? Here are some hints.

Again, remember how BTC’s price reacted to the news that Tesla would accept this crypto as payment for its cars.

Let’s Recap

In 2021, Litecoin is still a very good asset to trade, especially if you have no problems with self-control. We can never say it enough: any crypto is a high-risk/high-return asset that should be approached with a cool head. Ready for Litecoin trading? Go to the Olymp Trade platform to make the most of this crypto’s ups and downs.

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