Should I Buy Litecoin? 5 Things You Should Consider
Investing in cryptocurrency is slowly gaining traction in the modern world. Though it is still a relatively new venture, cryptocurrency investments have turned a few savvy investors into millionaires. It is always wise to diversify your portfolio to spread your risks when it comes to crypto investments.
There are so many digital currencies now other than Bitcoin and Ethereum. Most investors are unaware of the many altcoins or alternative coins they can add to their packages.
Litecoin is one of these coins you can consider adding to your investment. Since it is not as common as bitcoin and ether, you may not know about it too. However, if you are looking for a coin to diversify your portfolio, here are a few reasons you should buy Litecoin.
1. Litecoin is faster than Bitcoin
If you are already into cryptocurrencies, you probably know how transactions happen on the blockchain. Peer-to-peer money transfer is the main reason why most digital coins exist. It means that individuals can send money to each other without needing a third party or intermediaries like a bank or money transfer agency.
Bitcoin has been facilitating such transfers hence its popularity, but transactions on its platform are slow and expensive. Developers saw the need to create alternative coins to counter bitcoin’s slow transaction rates.
Litecoin is among the many such coins that have managed to increase the speed of transactions, thus attracting many users. Users can process transactions on its platform four times faster than on the Bitcoin blockchain. Litecoin might not be the fastest now, but it shows some promising technological developments making it a worthwhile investment. A project that keeps on innovating and evolving is a good investment.
2. Litecoin has a big market capitalisation
Market capitalisation is the total value of a particular commodity at one point in time. In the case of digital currencies, you calculate this value by multiplying the total number of coins in circulation with its current price.
Litecoin is currently trading at about $147 at writing this article, with a circulation of more than 69.3 million coins. Thus, its market cap is approximately $10.1 billion, placing it at number 20 in the cryptocurrency circles. A high market cap indicates that a coin is stable enough to withstand sudden market shocks.
The high market cap provides the currency with a cushion that protects it when it becomes highly volatile. It also means that a few whale investors cannot drive the price according to their whims. You can consider having a few of these coins for the long term, knowing that their price will remain relatively stable. You can find out more about our Litecoin price predictions here.
3. Litecoin is highly liquid
The liquidity of a digital coin is one vital factor that you cannot overlook when choosing a coin to buy. Liquidity is the ease with which you can convert an asset or a commodity into liquid cash. It is critical to invest in a coin that you can sell easily when you need to get liquid cash. It is especially important if you are entering into a short-term trade and want to make quick profits with price changes.
Litecoin is one of the most liquid coins in the digital coins market. If you want to determine a coin’s liquidity, you can check its 24-hour volume. This volume is the number of coins investors have bought or sold in the last 24 hours. In the case of Litecoin, this volume was more than 7.8 million coins, worth more than $1.1 billion. It shows that you could have moved as many as 100,000 units in just 24 hours.
4. Litecoin has a strong team of developers
There are so many digital currencies at the moment. Research shows that they could now be more than 10,000 coins in the industry today. Most of these coins are temporary pump and dump projects that you should avoid. A good development team means that the coin is a serious project with future prospects. It also means that it is well adaptable to technological advancements to sustain its presence in the market.
That said, Litecoin is among the serious projects in this industry. It has a team of experienced and skilled developers to ensure its continuity. The main developer was an engineer at Google and Coinbase. He is backed up by a team that has seen Litecoin surpass bitcoin in terms of speed and efficiency. The team was the first to use the Segregated Witness update and also featured Lightning Network. Such developments make a coin worth investing in, knowing that it could be something big and valuable in the future.
5. Large corporations are using Bitcoin
When large corporations accept using a digital coin, they have identified some useful features in that coin. These corporations infuse confidence in investors and stir up the coin’s value as its demand increases.
Litecoin is now working with UFC (Ultimate Fighting Champion), gaming giant Atari and Overstock.com. These companies allow their clients to pay for goods and services using Litecoins. Having such an acceptance has catalysed the growth of this digital currency. It has spurred its demand making its value grow in the last few years. Blockchain technology is slowly changing the gaming industry, and Litecoin is part and parcel of this growth. It would, therefore, be wise to invest in such a future.
Want to learn how to safely invest in Litecoin? Check out our comprehensive Litecoin buying guide here or purchase from our recommended platform below!
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