Litecoin is a digital currency created to provide cheaper and faster payments for smaller values than bitcoin. Litecoin was launched in 2011, and to date, it has survived the crypto market and ranked as one of the top altcoins by market capitalization. Because of the steady increase, holding a Litecoin in the long term has proven profitable. In recent years, a bullish trend in the cryptocurrency market has established lucrative trading with Litecoin. There are two ways to trade Litecoin – 1. through Spot exchange, 2. through a derivative like CFD trading.
Why is Litecoin Important to Traders?
- Litecoin is a well-known cryptocurrency. Like Bitcoin, Litecoin is an open-source global payment network, with no centralized authority controlling it. Litecoin was developed by Charlie Lee in 2011 and was designed to permit peer-to-peer payments instantly and at a low cost.
- Litecoin comes under the top 10 cryptocurrencies as per market cap. According to LTC predictions by experts, the price is expected to surge in the 2023 first quarter and will reach a price of $193; further, a downward trend is also predicted in 2024.
- Walletinvestor, known for its conservative forecasts, anticipates with Litecoin predictions a bullish trend and believes that within 12 months, the price might go up to $219, making it the best choice for long-term investment.
- The invention of Litecoin is based on an open-source cryptographic protocol. Litecoin uses a different blockchain and is considered a fork of a network that supports Bitcoin, contrasted by different functional algorithms, decreased block generation time, and increased supply of coins.
- Litecoin was developed to complement Bitcoin and not compete with the cryptocurrency. It is often referred to as “silver to Bitcoins gold.” This is because the coin created is cheaper, faster, and can handle more transactions at a time.
How to Trade Litecoin CFDs?
- There are a few significant differences between buying a cryptocurrency and trading CFD in the cryptocurrency market. The cryptocurrencies are purchased and stored in the wallet. Still, when the investor is trading CFDs, the product is stored in the account, and the financial authority regulates it. The investor has more liquidity when purchasing CFDs because they do not own the asset but have still purchased the contract.
- An investor has two methods when trading digital currency in the market. Firstly, the investor can buy the cryptocurrency on exchanges like purchasing Litecoin on the exchange, so they own it as a long-term investment. When the price rises significantly, they can sell their coins on the exchange.
- Secondly, the investor can go for CFD (contract for differences) on a particular cryptocurrency, and can speculate on the price difference. CFD is a financial instrument carried out between the investor and the broker. One party consents to paying the difference in the value of the security between the opening and the closing trade.
- The investor can either hold a long position, i.e., speculating that the price will rise, or have a short position, assuming the price will fall; This is considered a short-term investment as CFD is used for longer or shorter time frames.
To conclude, investing in Litecoins has been profitable in the long run; the LTC price forecast reveals that the price might show an upward trajectory in 2023 and later might go down. If the market conditions deteriorate, trading Litecoin can profit investors in all directions. With a combination of the right tools, the right platform, and a reliable trading strategy, Litecoin trading can effectively and quickly achieve good results.