How to Buy and Invest In Litecoin: Is it Worth It?

Investing
Updated: 15th Feb 2021
Written by Sean Graytok
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Investing
February 15, 2021
Written by Sean Graytok

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Some investors are speculating if a better version of Bitcoin exists and are now researching how to buy Litecoin (LTC).

As one of the oldest crypto projects, Litecoin is a viable investment option that is often debated in the crypto community.

To help you better understand how to invest in Litecoin and discover whether it is worth buying or not, we wrote an extensive guide that describes everything that the average investor should know.

But before showing you how to invest, we will first explain what Litecoin is all about.

What is Litecoin?

Litecoin is a peer-to-peer blockchain-based payments network designed for small transactions. It is the second cryptocurrency project ever made, and users have been trading LTC ever since 2011 when miners forked from Bitcoin.

Charlie Lee, a computer scientist from the U.S., is Litecoin’s original creator. However, note that the project is decentralized since the cryptocurrency’s development is headed by the Litecoin Foundation.

Litecoin’s primary purpose is to process small payments at the lowest fees possible. While the project’s code is similar to Bitcoin, there are still a few changes that make Litecoin different.

For example, there are faster confirmation rates due to frequent block generation, resulting in Litecoin having four times the token supply of Bitcoin.

Related: Is Bitcoin a Good Investment

How to Buy Litecoin (Step-by-Step)

Step #1. Choose a Cryptocurrency Exchange

At the time of writing, Litecoin is the seventh biggest cryptocurrency in the market. It is rare to find an exchange that does not have this asset listed, so availability will not be a problem.

However, there are still several things to consider when choosing your cryptocurrency exchange, like its user interface, security, and fee structure.

Gemini and Coinbase are great options if you want an exchange that is safe and easy to use.

Related: How to Buy Bitcoin

Step #2. Verify Your Account

Creating an account on an exchange only takes a few minutes. However, there is one more step which you need to complete to expand your account’s functionalities: verification.

Verifying an account means to connect it with your personal identity. Specifically, you must provide the exchange with the necessary private information to confirm who uses the account.

This is done by sending sensitive information such as your real name, address, documents signed under your name, past bills, a picture, etc.

Learn More: Is Cryptocurrency Safe?

Step #3. Fund Your Crypto Account

After finishing KYC, most crypto exchanges increase the amount of money that you can deposit. To fund your account, simply add money via a wire transfer or debit card. Both options are common in the market, and deposit fees usually do not exceed 2%.

It is possible to deposit a bunch of money; however, exchanges usually have a minimum limit of $30.

Since you have to pay for fees, we recommend funding your account in one transaction. Deposits take anywhere between an hour to several days, depending on the order’s size and location.

Step #4. Buy Litecoin

Start trading by visiting the exchange’s trading section and finding a relevant trading pair. If you have deposited cryptocurrencies, you will need a crypto/crypto trading pair.

Otherwise, you most likely have to find a stablecoin pair like USDT for LTC.

All you need to do is create an order and wait for the order book to fill it. After completing this step, you are officially an owner of Litecoin.

Step #5. Decide How to Store Your Litecoin

Do you have any storage plans in mind? Here are a couple of ways to store Litecoin after buying it on an exchange:

  • Hot Wallets: Download a software wallet on either your desktop machine or mobile phone and withdraw assets to the relevant address.
  • Cold Wallets: Need a securer option? Buy a hardware wallet like Ledger or Trezor and store your LTC offline.

You can also keep storing the asset on the same exchange where you have bought it. If the platform is reputable, there is no difference between storing LTC on your own or through the exchange. If you do not trust the exchange, simply withdraw to your personal wallet.

Step #6. Transfer Litecoin to Your Wallet

The section for withdrawals and deposits on exchanges is usually named ‘Wallet’ for obvious reasons.

Visit that section and scroll until you find Ethereum. Click on the withdrawal button and choose the amount of ETH that you wish to transfer to your wallet.

In the address field, paste your personal wallet’s address and make sure that it is correct. The transfer process should take anywhere between 10 to 30 minutes to complete depending on network congestion.

Best Places to Buy Litecoin

No idea where to buy the crypto you are looking for? Here is a list of the best places to buy Litecoin based on user recommendations.

#1. Gemini

Gemini is a reputable cryptocurrency trading platform headquartered in New York. It is one of the first exchanges to be regulated by the New York State Department of Financial Services.

Gemini is one of the most popular platforms that is gunning for the top trading giants such as Coinbase, and eToro.

You can buy, sell, and trade Litecoin on Gemini. In the case of theft or a widespread security breach, the company will completely reimburse your account.

Learn More: Gemini Review

#2. BlockFi

BlockFi is a crypto-financial services company based in the U.S. that is operated by Gemini. Its core products focus on earning interest from existing crypto assets, but you can also invest and trade on BlockFi as well.

BlockFi’s custodian is Gemini, which means that your assets are insured in this case as well. After buying Litecoin on this exchange, you can instantly start staking it to earn up to 8% in APY.

Learn More: BlockFi Review

#3. Coinbase

Coinbase is crypto’s leading exchange that features a bunch of major cryptocurrencies and even minor altcoins.

It is considered to be the first level for many beginners who are just starting out. If you want to buy Litecoin, Coinbase is definitely a great option to consider.

Based in the United States, Coinbase is an incredibly secure crypto exchange that provides accessible crypto investing.

The platform is secure, and its funds are even insured by the company in the case of hacks.

However, trading Litecoin on Coinbase might be expensive since the exchange charges incredibly high fees.

Learn More: Coinbase Review

#4. eToro

If you are a stock trader interested in trying out crypto, eToro is a perfect choice. This exchange offers a wide selection of cryptocurrencies that can be purchased on either eToro or the special eToroX crypto exchange.

Do note that while stock trading is commission-free, the story with crypto fees is entirely different.

Fees range anywhere from 0.75% to 3%, depending on the asset that you are trading. This makes eToro the most expensive exchange to trade on!

Learn More: eToro Review

Alternate Places to Buy and Invest in Litecoin

  • Robinhood: The perfect option if you want to trade both stocks and crypto.
  • Grayscale Trusts: Features an LTC investment fund tailored for institutional investors.
  • Blockchain ETFs: So far, Grayscale is the only one to feature an LTC ETF– like an investment vehicle.
  • TradeStation: A brokerage platform on which you can trade Crypto CFDs.
  • PayPal: Amongst its newest crypto selection, you can find Litecoin as well.

Learn More: Best FinTech Stocks

Advantages of Buying Litecoin

  • LTC is the perfect option for small payments as crypto becomes more mainstream
  • As most old cryptocurrencies have disappeared, Litecoin is one of the rare assets to survive the test of time
  • LTC is nowhere near its ATH, meaning that there is plenty of room for potential growth
  • It was one of the first cryptocurrencies to decisively move at the start of the 2020 crypto bull run

Disadvantages of Buying Litecoin

  • LTC’s underdog narrative is no longer popular due to the rise of DeFi
  • A larger token supply makes it less desirable as a store of value asset

Related: What is Ethereum?

Is it Safe to Invest in Litecoin?

Investing in Litecoin is safe as long as you buy LTC through reputable companies and vendors.

From the perspective of investment risk, Litecoin is a large and important project, making it unlikely to lose its value overnight.

As for security risks, it is almost impossible to lose your coins through hacks or theft. Even if it happens, the custodian who stores your LTC will reimburse you.

Should You Buy Litecoin?

Litecoin should only be bought if you believe it can compete with Bitcoin in terms of small payments. LTC may be slow in the market at times, but whales tend to aggressively buy when other cryptos are moving.

Litecoin may not be the best option right now, given that most investors are not concerned with making small crypto payments at the moment.

But as previously noted, LTC is a safe and secure investment. Moreover, it has yet to reach its all-time high again, unlike bitcoin and ethereum.

Related: How to Invest in Bitcoin in the Stock Market

Bottom Line: How to Buy Litecoin

Litecoin is a prominent cryptocurrency designed to facilitate small payments faster than Bitcoin’s capabilities.

It is the second oldest cryptocurrency and is still favorable amongst investors despite its lesser returns compared to other cryptos.

The project gained tremendous popularity after being listed by Mt. Gox in 2013. Since then, Litecoin is a consistent top 10 cryptocurrency and competes with Bitcoin, Ethereum, and others.

As the market continues to expand, many have started to wonder how to buy Litecoin. While Litecoin was crypto’s first mover in the recent bull run, it still has yet to outperform its peers in what has been crypto’s hottest year ever.

We recommend exchanges like Gemini, BlockFi, Coinbase, and eToro as the best places to buy Litecoin. Each exchange differs vastly, and it is up to you to decide which one suits you the best.

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Sean Graytok
Sean Graytok
Sean is a lifelong student of the financial, media, and marketing industries. He is a Generation Z investing expert and is on a mission to empower investors to make the most of their money.