In the world of cryptocurrency investing, Litecoin has long been a staple. With a market cap near $9 billion, this digital currency is firmly one of the most popular altcoins in the crypto landscape. However, like most cryptocurrencies, Litecoin has seen its fair share of volatility. And because it isn’t as popular as alternatives like Bitcoin and Ethereum, not everyone knows where they can buy Litecoin if they’d like to add some to their crypto wallet.
Fortunately, there are a few viable pathways to purchasing successfully, even if you’ve prioritized investing in crypto safely. If you’re finding yourseld wondering where you can buy Litecoin here’s what you need to know to get started.
Litecoin: An Overview
Litecoin is a type of digital currency. It was originally created in 2011, making it one of the earliest altcoins — any cryptocurrency that isn’t Bitcoin — on the market. Essentially, the creator’s goal was to introduce a lighter version of Bitcoin that featured reduced fees and significantly faster transaction times.
Like most cryptocurrencies, Litecoin relies on peer-to-peer technology. Mining is a critical part of the transaction-verification process, and it maintains a distributed ledger design. Functionally, Litecoin is essentially a Bitcoin fork, or deviation from Bitcoin that began with it. Litecoin relies on the same open-source and decentralized concept as you find behind the crypto leader, but it isn’t the same currency.
Many investors consider Litecoin the silver to Bitcoin’s gold. The goal in creating it wasn’t necessarily to overtake Bitcoin – regardless of any improvements – but to sit in a different position within the broader market.
How Litecoin Compares to Bitcoin
Litecoin was designed with speed and efficiency in mind. One of the creator’s main objectives was to implement transaction speeds that were four times faster than what Bitcoin offered. Additionally, the creators aimed to reduce fees along the way.
On the mining side – which is a critical process for transaction verification – it only takes around 2.5 minutes to mine a Litecoin. For comparison, Bitcoin takes closer to 10 minutes. Since that’s the case, more Litecoin transactions can occur in a given period, making this altcoin more scalable.
Additionally, Litecoin offers a larger supply. In total, Litecoin has a circulation of 84 million coins, while Bitcoin is limited to 21 million.
The Benefits of Litecoin
When it comes to the benefits of Litecoin, speed and scalability both work in its favor. This can make it more viable as a broad-scale payment mechanism because transaction verifications can move forward quickly.
Additionally, since there’s an ample supply of Litecoin, the cost of a single coin generally remains lower than Bitcoin, making this altcoin reasonably accessible. It’s also shown more price stability than some alternatives that were created around the same time. Couple that with lower fees, and Litecoin has some stronger financial footing than certain other altcoins.
Finally, Litecoin is one of the original altcoins to hit the market. That long-standing reputation has, so far, ensured interest in the coin hasn’t faded. That makes Litecoin highly visible and liquid, particularly in comparison to some alternatives.
The Drawbacks of Litecoin
Litecoin – like every cryptocurrency – isn’t without its drawbacks. While its increased transaction speeds make it an attractive option for broad use, it hasn’t been widely adopted as a payment mechanism. Competition in that arena is fierce, and Litecoin hasn’t gained the same traction as some alternatives, such as Ethereum.
The fact that Litecoin is functionally a Bitcoin fork doesn’t always work in the altcoin’s favor either. When it comes to Bitcoin alternatives, many investors want more differentiation than Litecoin provides.
Over time, Litecoin has remained a major player in the crypto landscape, but it’s actually losing market share overall. While it was the fifth-largest crypto in 2017, Litecoin doesn’t reliably stay in the top 20 today.
Some experts are also concerned that the creator of Litecoin didn’t keep a large number of coins personally. Instead, they have just a few in their wallet. While fears related to that are largely based on speculation, it nonetheless influences the market.
Where to Buy Litecoin
If you’re interested in buying Litecoin, you have plenty of options. Usually, your first step is to create an account at a cryptocurrency exchange, payment processer or brokerage that has Litecoin among its offerings. For example, Coinbase, PayPal and Webull all have Litecoin among their offerings.
In most cases, you’ll need to provide similar kinds of information to set up an account at any of the options above. Along with personal information, you may need to take steps to verify your identity and connect a bank account.
After creating an account and transferring in funds, you can purchase Litecoin pretty easily. You’ll simply find the Litecoin listing, set the terms of the trade and wait for the platform to execute the trade. In some cases, that process wraps up in seconds. However, if you’re using advanced features, that isn’t always the case. For example, if you place limit orders, the trade may execute immediately, after some time or not at all based on the conditions you’ve defined.
Deciding How Much to Invest
The amount you decide to invest in Litecoin depends on your personal preference and risk tolerance. In the end, all cryptocurrencies are volatile, including long-standing options like Litecoin. Since the choice is personal, it’s best to do some research and consider your risk tolerance. Ultimately, you want to choose a point that makes you feel comfortable above all else.
Generally, crypto should make up no more than 10% of your portfolio due to the associated volatility. However, you don’t have to go that far either.
Remember, as with other investments, you can always choose to invest more in Litecoin as time passes. You aren’t required to make a large purchase or even buy an entire coin at once in most cases. While you may encounter order minimums, most are reasonably modest. You can slowly explore this option if that better suits your style.
Managing Your Litecoin Investment
As you buy Litecoin, record your purchase prices for tax purposes. That way, if you sell or trade, you have critical data for future tax filings.
After you invest in Litecoin, you’ll need to decide how to store your crypto. Many exchanges, payment apps and brokerage options have built-in storage features, meaning you do have a convenient default option. However, you may want to transfer your Litecoin to a private wallet for safekeeping.
Whether that’s an option depends on the platform you choose. For example, Webull doesn’t support transfers outside of your account. PayPal doesn’t offer the capability either, though there are plans to allow it in the future.
However, if you use a cryptocurrency exchange, you typically can move your crypto off of the platform and to another wallet. You can go with a hardware wallet – also known as a cold wallet – or a software wallet, depending on what you prefer.
The transfer process is straightforward. Start by looking up the wallet address to the receiving wallet. Then, go to the sending account to transfer the Litecoin to the other address. In some cases, there are transfer fees, so keep that in mind. However, once the transition is complete, you can hold the Litecoin or send it to another platform that supports transfers, allowing you to use the investment as you see fit.