After Bitcoin, Litecoin is one of the most established cryptocurrencies in the blockchain arena. Founded by Charlie Lee in 2011, this top-10 digital currency permits faster, cheaper, and more scalable transactions than its Bitcoin counterpart.
If you’ve heard the buzz surrounding this cryptocurrency and want to get involved today, this guide will show you how to invest in Litecoin from the comfort of your home.
On top of walking you through the step-by-step process, we also explain how to find a good broker, what risks and rewards you need to consider, and why so many people have decided to invest in Litecoin over the past 10 years.
So, If you want to invest in Litecoin, learn how to with these five steps:
1. Open an account with a regulated exchange
2. Deposit some funds with a debit/credit card, e-wallet, or bank transfer
3. Choose how much Litecoin you want to buy
4. Confirm the investment
5. Leave your Litecoin stored until you decide to cash out
As you can see, investing in Litecoin online could not be easier!
What is Litecoin?
Litecoin is a cryptocurrency that is backed by blockchain technology. The platform was first launched in 2011 by Charlie Lee. The main purpose of Lee building the Litecoin project was to compete with Bitcoin.
That is to say, Lee was somewhat dumbfounded that Bitcoin transactions were required to wait 10 minutes before being confirmed. Additionally, Lee was concerned with the inability of Bitcoin to scale, as well as rising transaction fees.
In turn, Litecoin is able to confirm a transaction in just 2.5 minutes. This is four times faster and more efficient than Bitcoin. Litecoin can handle 56 transactions per second, while Bitcoin is limited to just 7.
Finally, Litecoin transactions are cheaper than Bitcoin, making them perfect for cross-border transfers. Like most other cryptocurrencies, Litecoin is decentralized. This is appealing to investors, as it means no single person or authority controls the network.
Additionally, Litecoin is not backed or controlled by a government, nation, or central bank. In terms of circulation, Litecoin will be capped to 84 million tokens. This in itself ensures that the cryptocurrency is finite, meaning that no inflation or quantitative easing is possible.
How Does the Invest in Litecoin Process Work?
The process of investing in Litecoin is now very simple, largely owing to the rise of online, regulated cryptocurrency brokers. Once you have made an investment in this popular digital coin, the hope is that it will increase in value.
Whether or not Litecoin is able to meet this goal is down purely to market forces. Much like other asset classes, this is based on demand and supply. For example, if there is little interest from new buyers, the price of Litecoin is likely to go down.
However, if market sentiment on the digital currency is strong, then the opposite will happen. In other words, if there are more people buying Litecoin than those selling, its value will naturally increase.
If it does, this allows you to sell your Litecoin investment for more than you originally paid.
If you’re completely new to the world of cryptocurrency investments, let us elaborate on the above with a simple, real-world example.
You invest in Litecoin at a stake of $2,000
When you make the investment, the price of 1 Litecoin is $70
You are a long-term ‘buy and hold’ investor, so you leave the Litecoin store in your wallet for three years
When the time comes to cash out, 1 Litecoin is worth $300
This means that the cryptocurrency is now worth 328% more than you originally paid
You exit the position and withdraw the proceeds back to your bank account
As you can see from the above, the Litecoin investment process is no different from any other asset. For example, you invested $2,000, Litecoin increased in value by 328%, so your total return three years later was $8,560.
Why Should you Invest in Litecoin?
With more than 7,000 cryptocurrencies to choose from in 2021, you can’t invest in all of them. In fact, the vast majority of these digital coins are practically worthless and certainly not suitable for your hard-earned capital.
To ensure you invest in Litecoin with your eyes wide open, below we list some of the reasons why you might decide to take the plunge today.
Litecoin was Worth Just $3 in 2013
Although the Litecoin project was first launched in 2011, it wasn’t until 2013 that LTC first hit a public exchange. When it did, the digital currency was priced in the $3 region.
If you were shrewd enough to make an investment in Litecoin back then, you could well be a millionaire today.
This is because Litecoin hit all-time highs of over $350 in early 2018. This means that in just five years of holding onto your Litecoin, you would have seen gains of over 11,500%.
This means a $10,000 investment would have grown to well over $1 million! With that said, Litecoin investors have not seen the $350 price level since it was hit in 2018.
Instead, the digital currency has hit lows of sub-$30. 2020 was a great year for Litecoin, though. In fact, from the 52-week low it hit in March, the digital currency has since seen an increase of over 130%.
Litecoin has held its own as a Top-10 Cryptocurrency
Many cryptocurrencies have found themselves on the top 10 list in terms of market capitalization. However, most of these digital coins have slowly faded away.
This isn’t the case with Litecoin. On the contrary, the cryptocurrency has pretty-much remained a top 10 coin since it first hit a public exchange in 2011.
At the time of writing, Litecoin is sitting between Bitcoin Cash and Chainlink with a market valuation of over $5 billion. This is, however, still a drop in the ocean when you consider the digital currency carried a market capitalization of just under $19 billion in 2018.
Nevertheless, we have no doubt that Litecoin has firmly positioned itself as a leading cryptocurrency and there is no reason to believe that this will end any time soon.
You Get More Bang for Your Buck
There is no denying that Bitcoin is the largest, most popular, and de-facto cryptocurrency of choice with investors. However, at 2020 highs of $19,500 - some would argue that this price-point is somewhat unattractive.
Sure, you can invest in Bitcoin with small amounts, but who wants to own a ‘fraction‘ of a cryptocurrency? With this in mind, when you invest in Litecoin, you can get a lot more for your money. For example, let’s suppose that you have $700 to invest.
At current prices of around $70 per Litecoin, you would get 10 full coins. In the case of Bitcoin, at $19,500 your $700 investment would get you just 0.035 of 1 BTC!
Litecoin is Liquid = Fast Access to Cash
An additional reason why you might decide to invest in Litecoin is that the cryptocurrency is very liquid. This means that you can easily cash out your position without needing to worry about liquidity. As we noted just a moment ago, Litecoin carries a huge market capitalization of $5 billion. In terms of trading volume, more than $3.4 billion worth of Litecoin has changed hands in the last 24 hours alone.
Taking this into account, an investment in Litecoin can be cashed out whenever you see fit - 24/7.
This is especially the case if you use a regulated broker like eToro. As you won’t be required (or able) to withdraw your coins out, you can exit your position instantly - and then withdraw the cash proceeds back to your debit/credit card, e-wallet, or bank account!
Would you consider investing in Litecoin?
How to Invest in Litecoin - Various Options Available
There are many ways in which you can invest in Litecoin - some better than others. The method that you opt for will ultimately depend on your own personal preference. However, you do need to spend some time assessing the fees associated with your Litecoin investment, as well as safety and regulation.
Nevertheless, to help clear the mist, let’s explore some of the most popular ways of investing in Litecoin in 2021.
Litecoin ATMs
Cryptocurrency ATMs are now a thing - and have been for several years now. In fact, globally, there are more than 13,000 such terminals across 71 different countries.
Although most of these ATMs only allow you to buy Bitcoin, you would be surprised by how many also supported Litecoin.
For example, the US alone is home to over 7,000 cryptocurrency ATMs that allow you to invest in Litecoin.
Europeans are less fortunate, with just over 800 available. 105 of these machines are in the UK alone. There are a few Litecoin ATMs scattered across South America, Asia, and Australia, but the numbers are tiny.
If you do have a suitable ATM close to where you live, the Litecoin investment process works like this:
You visit your nearest cryptocurrency ATM
You begin the process by selecting Litecoin as the cryptocurrency you wish to invest in
You specify that you wish to invest $100
The ATM lets you know that you will receive $88 worth of Litecoin, while the rest constitutes fees and commissions
You insert $100 into the cryptocurrency ATM
The ATM then prints a receipt that contains the information as to how you can claim your Litecoin
There are a few things to note about the example illustrated above. Firstly, investing in Litecoin via an ATM is simple and convenient - especially if you have a terminal close to your home.
However, there are several major drawbacks, too. Firstly, fees are usually between 10% and 20% when you use a Litecoin ATM. This is huge, as platforms like eToro allow you to invest commission-free.
Secondly, the Litecoin investment process doesn’t stop once you walk away from the ATM. Instead, you need to claim the coins via a third-party cryptocurrency wallet. This is easy for those with an understanding of how to use digital wallets. But, this can be imitating for first-timers.
All in all, if you’re wondering how to invest in Litecoin in the easiest and most cost-effective way, consider using a regulated online broker. Check out the section below to find out how this works!
Litecoin Broker
More and more online brokers are entering the cryptocurrency space. Some specialize exclusively in digital coins, while the likes of eToro also offer stocks, ETFs, and CFDs.
Nevertheless, the process of investing in Litecoin via an online broker is so easy that it often takes less than 10 minutes. For example, you’ll be required to quickly open an account by entering some personal information and contact details.
Then, by using a top-rated broker that supports everyday payment methods, you can instantly deposit funds with a debit/credit card or e-wallet. Finally, it’s then just a case of entering the amount that you want to invest in Litecoin. Job done.
Choosing to invest in Litecoin via an online broker is not only better because of convenience. On the contrary, this option is both cheaper and safer.
For example, popular broker eToro - which is now home to over 13 million verified users, allows you to invest in Litecoin commission-free. That’s a lot cheaper than the 10-20% average you’ll pay at a cryptocurrency ATM.
Additionally, eToro - and a small number of other brokers in the space, is heavily regulated. As such, you can invest in Litecoin with your preferred payment method in a safe and secure manner.
How to Choose a Platform to Invest in Litecoin
So now that we have established that the best way to invest in Litecoin is via an online broker, we now need to discuss how to choose a platform. After all, there are hundreds of online providers that support Litecoin, so the choice is plentiful.
In the sections below, we have identified a range of core metrics that you need to explore before you choose an online broker to invest in Litecoin.
Licensing and Reputation
Sure, you might come across an online broker that offers super-low fees, heaps of supported payment methods, and lots of cool features and tools - but if it doesn’t hold a reputable license then you should walk away.
Why? Well, most cryptocurrency exchanges in the online arena are unregulated. This means that you are depositing funds into a platform that doesn’t take its regulatory responsibilities seriously. As such, there is every chance that you will get scammed.
Instead, set your focus on brokers that are regulated by at least one reputable body. eToro, for example, is licensed and regulated by the FCA (UK), as well as ASIS (Australia) and CySEC (Cyprus).
eToro also has the legal remit to accept US citizens, as the platform is registered with FINRA. All in all, choosing a heavily regulated broker like eToro to invest in Litecoin should be a minimum requirement.
Fees to Invest in Litecoin
No matter which online broker you decide to use, you’ll need to pay a fee to invest in Litecoin. As you can imagine, this can vary quite considerably.
A lot of investors will turn to Coinbase, as the platform supports debit cards and local bank account transfers. However, the platform charges a rather hefty trading commission of 1.49%.
This needs to be paid when you invest in Litecoin and again when you decide to cash out. Additionally, Coinbase also charges a 3.99% fee if you wish to invest in Litecoin with a debit card.
While you won’t need to pay the 1.49% commission in conjunction with the 3.99% investment fee, you will when you decide to cash out.
Fortunately, there are other options in the market that are significantly cheaper.
Once again, eToro stands out here - as the regulated broker allows you to invest in Litecoin without paying any commission at all. The only fees that you need to consider is a 0.5% FX charge on non-USD deposits, and $5 on each withdrawal request.
Minimum Litecoin Investment and Payments
At the time of writing, Litecoin is worth just over $70. This is great, as it allows you to buy and own several coins without breaking the bank. However, the minimum that you are able to invest in Litecoin can and will be dictated by your chosen cryptocurrency broker.
For example, Coinbase is great in this respect, as there is no minimum deposit in place. However, you will be penalized heavily for trading small amounts. For example, if you invest in Litecoin at a stake of $55, you'd pay $2.99 in commission. This is an effective rate of 5.4%. Investing in Litecoin at just $10 would cost you $0.99 in commission, which is almost 10%!
eToro, however, does have a minimum deposit policy of $200. But, the platform allows you to invest in Litecoin from just $25 per trade. And of course - as the broker is commission-free, you won’t get penalized by investing in small amounts!
Storage and Cashing Out
Finally, when you invest in Litecoin with an online broker, you need to think about how you intend on keeping your funds safe. Some brokers require you to withdraw your Litecoin investment out to a private wallet as soon as the purchase is made.
Others give you this option alongside the ability to keep the coins in your brokerage account. This is likely to be the way to go if you are a newbie, as cryptocurrency wallets can be somewhat confusing.
With that said, if you are planning to keep your Litecoin investment at your chosen broker, you need to make sure that it is regulated. You also need to check what security controls the broker has in place to prevent the threat of a third-party hack.
Ready to invest in Litecoin?
How to Invest in Litecoin Today - Step-by-Step Walkthrough
Want to know how to invest in Litecoin in less than 10 minutes? We are now going to walk you through the process with commission-free, regulated broker eToro!
Step 1: Open an eToro Account
You will first need to open an account with eToro. Simply enter your personal information and contact details. After confirming your email address and mobile phone number, you're good to go.
Step 2: Upload Some ID
eToro is regulated by three reputable financial bodies, as well as being registered with FINRA. As such, all account holders must be verified before a withdrawal can be made.
This should take you less than a minute if you have your passport/driver’s license to hand. Simply upload a clear copy of the aforementioned document and eToro should be able to verify it instantly.
Note: If you are not depositing more than $2,250 right now, you can upload the above documents at a later date.
Step 3: Make a Deposit
eToro allows you to deposit funds instantly with a debit/credit card or e-wallet. This includes Paypal, Skrill, and Neteller. Or, you can opt for a local bank transfer, but this can take up to 7 days to arrive.
Whichever payment method you opt for, the minimum at eToro is $200.
Step 4: Search for Litecoin
Once your deposit has been added to your eToro account, you can then invest in Litecoin. Simply enter ‘Litecoin’ into the search box and click on the ‘Trade’ button.
Step 5: Complete Litecoin Investment
Finally, you need to enter the amount that you want to invest in Litecoin. The minimum is just $25.
Once you click on the ‘Open Trade’ button, the Litecoin investment process is complete!
Step 6: Cashout Your Litecoin Investment
You can sell your Litecoin investment at eToro 24 hours per day, 7 days per week. You can do this through your eToro portfolio by simply clicking on the ‘Sell’ button.
When you do, Litecoin will be instantly sold at the current market price - commission-free. You can then withdraw the proceeds back to the same payment method that you used to deposit.
How to Invest in Litecoin - The Bottom Line
By reading this guide in full, you should now have a full grasp of how to invest in Litecoin from the comfort of your home.
It’s simply a process of choosing a regulated broker, making a quick deposit, and deciding how much money to invest in Litecoin.
If you’re keen to get the process started right now, eToro is a good choice. You can invest in Litecoin with this heavily regulated broker without paying any commission.
You can also choose from a wide selection of convenient payment methods, and the minimum investment is just $25!
Virtual currencies are highly volatile. Your capital is at risk.
FAQs
How much should I invest in Litecoin?
At the time of writing, 1 Litecoin is worth just over $195. As such, you’ll need at least this amount if you want to buy a full coin. However, if you sign up with regulated broker eToro, you can invest just $25 into Litecoin. Either way, just make sure that you never invest more than you can afford to lose.
Is Litecoin a good investment in 2021?
Litecoin saw gains of over 130% in 2020 from its March lows of sub-$30. There is much to like about this cryptocurrency project moving into 2021, but there is no knowing which way the price will go. This is why you are advised to perform lots of independent research before tracking the financial plunge.
How do I start investing in Litecoin?
To invest in Litecoin right now, all you need to do is open an account with eToro, meet a $200 minimum deposit with debit/credit card or e-wallet, and decide how much you want to buy,
Can I invest $100 in Litecoin?
Yes, the minimum Litecoin investment is just $25 at eToro.
Can you lose money on Litecoin?
Yes, if the price of Litecoin goes down after you have made an investment, you can lose money. This is no different from any other asset class in the investment arena.