Forex Trading

What is Litecoin LTC? The complete guide to understanding LTC

A brokerage firm allows you to buy and sell Litecoin on the platform, and you have to part with some trading fee for the transaction to be facilitated on your behalf. The financial markets are driven by the forces of demand and supply. The prices of coins in the cryptocurrency market can also be driven by supply, and this factor has been affecting LTC’s uptrend over the years. Litecoin is a cryptocurrency created from a fork of the Bitcoin blockchain but with several changes.

Litecoin is a “peer-to-peer Internet currency”, capable of supporting almost zero-cost and fast payments worldwide. It is an open-source and fully decentralised global network with excellent trading volume and liquidity. The name comes from his vision of making “a lighter version of Bitcoin” which would be more convenient to use on a day-to-day basis.

The spread acts as an indirect fee, as your position will always open at a slight loss. Typically, brokers that offer commission-free trading will have much wider spreads than those that charge per trade. Trading commissions are a straightforward charge that is levied for every trade that you make. Some providers charge a flat rate, but most will charge a percentage of the trade.

As well as this, CFDs are a more established and regulated financial product. Litecoin was conceived as a complementing, rather than competing, cryptocurrency to Bitcoin. Litecoin (LTC) is cryptocurrency that is an off-spring of Bitcoin created by Charlie Lee in 2011. Litecoin was designed to allow peer-to-peer payments that are instant and very low-cost. It’s one of the top 5 biggest cryptocurrencies in terms of market capitalisation.

  1. The Litecoin price spiked in November 2022 to around $80, then dropped back to the previous low.
  2. Most importantly, ensure that the platform you want to use is regulated in your country.
  3. As we have already touched upon, CFD trading allows a trader to profit from the price movement of an underlying asset without ever owning that asset outright.
  4. BYDFi does not charge deposit fees, only a flat fee per transaction to cover the base maintenance costs.

Still, if you feel more comfortable that way, you can handle security yourself and stash the funds with your own crypto wallet. Either way, try to make sure intruders have no access points to your crypto portfolio. Similar to Bitcoin, Litecoin is also open source and uses proof-of-work (PoW) to verify each transaction made within the blockchain.

Buy or Sell Litecoin?

Litecoin, like Bitcoin, uses a PoW consensus mechanism to secure its network. This mechanism requires miners to solve complex mathematical problems to validate transactions and create new blocks. The security of Litecoin’s network is underpinned by this intensive computational process, which makes it extremely challenging for any single entity to manipulate the blockchain. Litecoin is built on a blockchain technology similar to that of Bitcoin but with some distinct differences that cater to its unique value proposition. The blockchain of Litecoin is a decentralized ledger that records all transactions across a network of computers.

As you can see, there are heaps of factors to consider before taking the plunge and trading Litecoin. Next, you need to decide how and when you wish to open your trade. You effectively have two choices at this stage, you can either open a trade on the spot (a market order) or choose to enter at a specific point (a limit order). Before we get into the finer details of Litecoin trading, it’s important to understand what exactly is happening beneath the surface.

Litecoin (LTC): What It Is, How It Works, vs. Bitcoin

These include payment processing fees – charged for withdrawing and/or depositing funds to your brokerage account. It is also not uncommon for platforms to have an inactivity fee if you don’t make any trades for a given period. Once again, these will vary between platforms so be sure to do your research when opening an account – these additional charges should always be factored in when you trade Litecoin. With unique technology and affordable transfers, Litecoin can make an excellent addition to any investor’s portfolio. It’s important to remember that the cryptocurrency market as a whole is still largely unregulated.

Another thing to consider when choosing a broker is what level of trader you are. If you’re completely new to the financial markets, then you’ll want to find a provider that can help you get started. Many popular brokers have mitigated this problem by creating their own proprietary gann trading strategy trading platforms, with the more inexperienced trader in mind. Any news relating directly or indirectly to cryptocurrency will affect prices. For example, if there are rumours that suggest a change in regulation for digital currencies, the prices will react accordingly.

Ways To Trade Litecoin (LTC)

Most US-based exchanges offer LTC, and you can purchase it through many international online brokerages. BYDFi will show you accurate information on fees, costs, and the number of LTC coins you get when you place the order and execute the transaction. Transfer times will be different depending on the payment method of your choice. As for BYDFi’s part, the transaction is done within 2-10 minutes.

As mentioned earlier, Bitcoin uses SHA-256 and Litecoin relies on a modified version of Scrypt to generate coins. The difference in protocols has implications on transaction processing times for both coins. Litecoin is four times as fast as Bitcoin in processing and confirming transactions.

Brokerage platforms like that of PrimeXBT, also come equipped with trading tools ideal for both beginners and experienced traders. The price of Litecoin plays a major role in the coin’s market cap. Growth in the market cap happens when the price gains and investors usually monitor the fluctuations in the market cap. Litecoin has not been receiving a lot of good press over the years. This is similar to the broader cryptocurrency market that has been shrouded with a lot of negativity, given that it is yet to be regulated on a comprehensive scale.

Here, the reward for mining new blocks is halved, decreasing the rate at which new Litecoins are created and affecting its inflation rate. Litecoin’s early years saw it emerge as a valuable digital asset, at times ranking among the top cryptocurrencies by market cap. Despite fluctuations in value and ranking, Litecoin has maintained a strong presence in the crypto market due to its reliability and the community’s trust in its operation. Despite Litecoin (LTC) being in the top twenty listed cryptocurrencies, it seems that consumers aren’t putting it in the same boat as other cryptocurrencies in the space.

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