One of the altcoins that has survived the test of time is Litecoin. This lightweight alternative to BTC was born in 2011 and was programmed by Charlie Lee as open source software.
More than 10 years later, this currency remains in Coinmarketcap’s top 30 cryptocurrencies, is accepted on most exchanges and has very low fees that make it a good alternative for transporting value.
It may seem that with so many new projects: the DeFi landscape, Play-To-Earn and highly scalable blockchains such as Solana and Avalanche, Litecoin seems to have become a thing of the past. However, it is worth taking a closer look at its functionalities and its roadmap to know that the project is not dead and still has a lot to offer.
OVERVIEW OF THE LITECOIN CRYPTOCURRENCY
Litecoin was born as an alternative to Bitcoin in terms of small transactions. It was born with a maximum supply four times higher than Bitcoin (providing value in the form of smaller units of measurement) and with a block processing speed four times faster: just 270 seconds.
In its beginnings it sought to be the “silver” of the crypto world, in which Bitcoin is the equivalent of gold. For this reason it uses a design and colour reminiscent of silver. At first it succeeded: in 2013 it was the altcoin with the largest market capitalisation.
It was not able to maintain this position for long. With the arrival of Ethereum and its smart contracts, Ether established itself as the most important altcoin in the crypto market, and no matter how many Ethereum Killers have been released, no one has managed to dethrone it.
Despite this, Litecoin remains one of the most widely used cryptocurrencies on the market. Thanks to its low fees and longevity, it is the first payment option (after Bitcoin) for many services offered on the web.
You are probably wondering: Where can I buy Litecoin? If you are in the US or an EU country, you can buy litecoin on Сhangelly , a cryptocurrency exchange platform with various exchange options for fiat currency.
LITECOIN IN THE SHORT TERM
In 2022, one thing seems to be clear: the bull run that began in 2020 with the halving of Bitcoin is over. One reason for this is the Federal Reserve’s eventual interest rate hike in 2022, which causes large investors to move into safer assets such as government bonds or real estate.
With big money exiting the unpredictable crypto market, it seems that trading Litecoin in the short term is not the best option. However, if you are knowledgeable about futures options or isolated margin leverage, you can set up a strategy to bet against Litecoin.
By taking short positions, you can profit from a cryptocurrency’s decline, as this process involves borrowing an amount of Litecoin (or another asset) with the promise to pay back the same amount after a certain or unspecified period of time. If the price of the asset falls, you can buy it cheaper and return it, after taking a profit.
You need to be careful. If you are not familiar with leverage and the futures market, but still want to trade, it is best to take small positions with little leverage while learning about technical and fundamental analysis. In case the asset goes up instead of down, you expose yourself to a total liquidation of your position.
LITECOIN FOR THE LONG TERM
As long as you are betting on solid projects with a future, buying cryptocurrencies for the long term is the best option. A bear market is an excellent opportunity to buy Litecoin, but as you never know how far the market will go down, it is a good option to use the dollar cost average strategy.
To do this, you must buy Litecoin every month, with an exact amount in fiat money. If you buy 50 euros worth of Litecoin every month, you will have spent 600 euros by the end of the year, but the average cost at which you bought the crypto will keep you prepared for the following year, regardless of whether the market turns bullish or bearish.