Is Litecoin a Good Investment, and Why Does It Remain a Top Crypto?

With the upcoming halving event, Litecoin (LTC) has been increasing in popularity, its price pumping by 8.9% over the past two weeks and reaching a high of $94.77 (as of May 24, 2023).

Litecoin’s price pump has significantly increased its market capitalization, surpassing meme coin Shiba Inu (SHIB) and Binance USD (BUSD).

Given the price surges in LTC, is it a good investment now? In this article, we’ll explain what Litecoin is, why it has remained a top crypto, the risks of investing in it and whether you should either trade or invest in Litecoin.

Key Takeaways:

• Litecoin is a global, open-source peer-to-peer cryptocurrency network that allows people to send payments worldwide quickly and inexpensively.
• There’s been a recent rise in LTC’s price due to its upcoming halving event, likely to occur around Aug 3, 2023.

What Is Litecoin (LTC)? 

Also widely known as Digital Silver, Litecoin is an open-source, global peer-to-peer (P2P) cryptocurrency network that allows people to send payments worldwide quickly and inexpensively. Founded on Oct 13, 2011, Litecoin was created as a fork of Bitcoin (BTC) to improve on three main issues faced by the Bitcoin network:

1. Speed: Long transaction times
2. Scalability: Frequent network congestion
3. Centralization: Concentration of mining pools

Litecoin was founded by former Google employee and Coinbase engineering director Charlie Lee, who decided to create a “lighter” version of Bitcoin that would enable faster transactions, greater scalability and lower transaction fees.

LTC was built to use the Scrypt algorithm with a proof of work (PoW) consensus. Scrypt is more cost- and power-efficient and accessible than the SHA-256 algorithm used by Bitcoin. This makes it possible for regular consumers to use Scrypt to mine Litecoin, lowering the barrier to entry for miners and enhancing the decentralization of mining power.

Litecoin Halving

Using Litecoin’s PoW mechanism, miners are rewarded with LTC when they complete a block. Similar to Bitcoin, the rewards for mining Litecoin decrease over time in a process known as halving. The following are the key dates for Litecoin rewards halving:

• Aug 25, 2015: From 50 LTC per block down to 25 LTC
• Aug 5, 2019: From 25 LTC per block down to 12.5 LTC
• Aug 3, 2023: From 12.5 LTC per block down to 6.25 LTC

As the upcoming Litecoin halving event is just a few months away, Litecoin has recently been gaining more attention from the crypto world, its price pumping to a high of $94.77 on May 18, 2023. This recalls past halving events, in which LTC’s price surged several months prior due to reduced supply and sustained demand. 

For example, before its 2019 halving event, Litecoin witnessed a notable price increase. Starting at $30 in January, LTC price surged to a peak of $141.82 on Jun 23, 2019. Similarly, preceding its halving event in 2015, LTC’s price experienced an upward trajectory, from a low of $1.45 in May to a price of $7.66 by Jul 9, 2015.

History of Litecoin

Here are the key milestones achieved by the Litecoin team:

2011: Creation of Litecoin

Charlie Lee forks Bitcoin, modifying Bitcoin’s code with several enhancements.

2013: Charlie Lee Joins Coinbase as Engineering Director

Litecoin experiences positive price action, soaring by 10x from $3 to $30 when the news is released.

2017: Technological Advancement

The adoption of SegWit and the Lightning Network layer further enhance Litecoin’s

2017: Controversy

Charlie Lee sells all of his Litecoin holdings in December, coinciding with the time Litecoin peaks in price, undermining the faith of investors and creating speculation about Lee’s potential manipulation of Litecoin prices. However, Lee clarifies that he acted over concerns of his growing influence on Litecoin, which could lead to a conflict of interest. More details can be found here.

Price History of Litecoin

Here’s a timeline of Litecoin’s price action since its launch.

2011

Launched just two years after Bitcoin, Litecoin quickly gains followers and reaches a high of $0.30.

2013

In Q4, Litecoin experiences a price increase of 1,000%, reaching an all-time high of $44.53.

2014 – Mid 2017

After the euphoria of a 1,000% price increase, the price of Litecoin drops significantly over the next three years, trading below $5 and reaching a low of $1.38.

Mid 2017 – End 2017

In April, Litecoin’s price finally manages to surpass the $5 mark and skyrockets to a high of $319.26 in December, an increase of over 6,000%.

End 2017 – End 2020

The price surge is once again unsustained, and as the cryptocurrency market crashes in 2018, LTC’s price plunges to between $20 and $130 over the next two years with many cryptocurrencies experiencing the same fate.

2021

LTC reaches an ATH of $410.26 in May 2021, breaking the previous high of the 2017 bull market. Its price then experiences a sharp drop shortly after, trading between $100 and $280 through the end of 2021. 

2022

Given the bear market, Terra-LUNA crash and FTX debacle, the crypto market as a whole takes a beating, with LTC’s price also in a downturn since its all-time high. 

2023 – Current

LTC’s price shows growth in the beginning of the year, from $69.95 on Jan 1, 2023 to a peak of $102.83 on Feb 16, 2023. Despite its decline in March to $69.29, LTC quickly recovers, climbing to $101.82 by mid-April. As of May 24, 2023, LTC is trading at $86.37, with a market cap of more than $6.3 billion and a 24-hour trading volume of over $576 million. It has a circulating supply of 72.9 million tokens and a total supply of 84 million.

How Litecoin Remains a Top Crypto Even After a Decade

Having existed for a decade, Litecoin’s valuation still remains within the top 20 cryptocurrencies in the market. As a matter of fact, with its recent surge in price, it’s managed to make its way to the top 15. There are still growth opportunities, given its technical potential and the leadership of Charlie Lee, who possesses great technical expertise.

Following are some of the unique advantages effected by Litecoin that could potentially make LTC a good investment.

Higher Scalability

Litecoin generates blocks every two and a half minutes, which is four times faster than Bitcoin’s block mining time of ten minutes. As such, Litecoin’s network is able to achieve greater throughput.

Faster Transaction Speed

Litecoin has a transaction processing speed of 54 TPS, which is markedly higher than Bitcoin’s transaction processing speed of 5 TPS.

Decentralization

Scrypt is used to power Litecoin’s PoW consensus mechanism, giving the network a lower barrier to entry and allowing more individuals to participate in Litecoin mining. This contributes to the network’s decentralization, given that mining power is no longer concentrated among bigger players who can afford mining.

Lower Transaction Fees

Litecoin has a fee structure 1/50th the size of Bitcoin’s, which significantly reduces transaction costs.

Privacy Function

The Litecoin Improvement Proposals of November 2019 included the MWEB (MimbleWimble Extension Block) update, which would improve anonymity for both senders and receivers of transactions on Litecoin’s network. 

Now, with the majority of nodes having given their permission, MWEB is finally available. Activated on May 19, 2022, this upgrade has brought substantial privacy feature enhancements to the Litecoin network. Transactions can be kept private while they’re getting verified. With MWEB, users can opt in as necessary to conduct private transactions, and transaction anonymity is guaranteed — so that the transaction amounts are only known to the sender and receiver.

Moreover, MWEB is more comprehensive than its recently implemented privacy measures for Litecoin users alone. MWEB also makes significant advancements to blockchain operations. For instance, its cut-through capability assists in removing all unnecessary transaction data from blocks so that long transactions are condensed into a single one. In other words, the block only records one input-output pair, eliminating the need to record each input and output separately. This contributes to network efficiency.

Widespread Usage

Over 3,000 businesses accepted LTC as payment in January 2022, a relatively large number. Due to its quick adoption, Litecoin has become one of the most popular cryptocurrencies for investments with practical uses. 

The Litecoin Foundation asserted in January 2022 that Visa would permit owners to use the Litecoin Card to spend Litecoin. Coinbase, BitPay, NOWPayments, CoinGate, Alliant and CoinPayments are examples of cryptocurrency-native payment processors that accept Litecoin payments. Online retailers can accept Litecoin payments through e-commerce systems such as Shopify and WooCommerce.

Good Traction

In 2021 and 2022, the Litecoin team hit multiple milestones. For instance, In 2021, Litecoin saw the introduction of the OmniLite token creation platform, which enables developers to build NFTs and construct their own bespoke cryptocurrencies on the network. LiteVerse, the first NFT marketplace on the Litecoin network, was introduced in 2022. A Litecoin-based Lightning Network mobile wallet, as well as user-friendly MWEB-integrated mobile wallets, have also been announced by the developers.

Given the abovementioned properties of Litecoin as a blockchain and the developments they’ve accomplished within the past two years, one can argue that Litecoin is indeed a cryptocurrency to invest in.

Litecoin Price Prediction

Litecoin has fluctuated in value since it first launched back in 2011. 

Expert analysts from PricePrediction believe that LTC’s price will surge to $134.95 by the end of the year, and will continue to rise to $277.76 in 2025. LTC is expected to then surpass its ATH to reach a new peak of $613.27 by 2027, and to break the $1,000 mark by 2029 at $1,281.26. Its price is projected to reach $2,590.49 by 2030.

This growth is also supported by analysts at DigitalCoinPrice, though less bullish than the Litecoin forecast at PricePrediction, with LTC closing the year at just $201.08. LTC is expected to rise to $333.77 by 2025, $419.67 by 2027, $683.45 by 2029 and $959.69 by 2030.

Historically, Litecoin halving events have had significant effects on LTC’s price and on market sentiment. Previous halvings have often resulted in bullish trends, driven by reduced supply and sustained demand. However, it’s important to acknowledge that past performance does not necessarily guarantee future results, given the highly volatile nature of the impressionable cryptocurrency market. As such, it’s advisable for you to do your own research before making any investment decisions.

Is Litecoin a Good Investment?

Despite the pros of Litecoin as mentioned in the previous section, there still remain risks to investing in it. The privacy function mentioned above serves as a double-edged sword for Litecoin, having also attracted negative attention.

Despite the excitement surrounding transaction confidentiality that Litecoin has introduced with Mimblewimble, problems have appeared on the regulatory front, particularly with regard to know your customer (KYC) and anti-money laundering (AML) rules.

On Jun 8, 2022, just a short while after Litecoin’s official launch of the MWEB protocol, five leading South Korean exchanges — Upbit, Bithumb, Coinone, Korbit, and GOPAX (now closed) — delisted Litecoin. Following the implementation of strict regulation and an outright ban on Dark coins by regulators in 2020, South Korean exchanges have avoided privacy-related cryptocurrencies.

Should You Trade, or Invest, in Litecoin?

You can choose to purchase Litecoin and keep it as an investment item in your wallet. If price changes are significant, owning this virtual currency will give you a chance to gain from capital appreciation. Holding Litecoin for an extended period may also pay off nicely as its price reaches new heights, due to the upcoming halving event or the potentially soaring price of Bitcoin.

Otherwise, you can choose to trade Litecoin with either spot or derivatives trading, each of which can accommodate long and short positions.

To learn whether investing or trading is better suited to you, check out our article here.

How Much Should You Invest?

The number one rule for all crypto investment is not to invest more than you can afford to lose. This applies whether you’re a beginning or advanced trader. Also, diversification is a well-known practice — such as investing no more than 10% of your portfolio in any altcoin.

When applied to trading, the main rule is straightforward: Never trade more than 1% of your capital in a single transaction. Stick to this rule, and your funds will be protected. 

Where to Trade or Invest in Litecoin

You can buy Litecoin on most cryptocurrency exchanges to hold for an extended period. However, you can also trade perpetual contracts to speculate on LTC, with a predetermined price at a specified time in the future.

For instance, Bybit offers both the LTC/USDT Spot pair and LTCUSDT Perpetual contracts. You can buy LTC with the USDT stablecoin via a Perpetual contract with leverage. Simply fund your verified account with USDT, or convert another cryptocurrency to USDT. 

Sign up for a Bybit account now and start trading!

Closing Thoughts

Overall, there are multiple factors that contribute to the value of Litecoin. Other than the faster, more scalable and decentralized design of the blockchain itself, Litecoin has also achieved significant traction with regard to adoption and usage.

#Bybit #TheCryptoArk