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Is Litecoin a good investment?

Is Litecoin a good investment? Let’s take a look at what sets this altcoin apart from BTC, how it performed in 2019, and what’s ahead in 2020

Is 0'>Litecoin a good investment? Of course, it’s a resounding yes if you ask ardent supporters of this cryptocurrency – the seventh biggest in the world based on market capitalisation. But if you’re tempted to invest in Litecoin, it’s best to perform your own research and find out more about what makes this digital asset tick.

Litecoin investing: what is it?

On the face of it, you may think that Litecoin is exceedingly similar to 0'>Bitcoin – near identical, in fact. However, a Litecoin investment does mean that you’re going to be purchasing a coin that’s built in a different way, with different “tokenomics”.

Whereas BTC’s supply has been fixed at 21 million, LTC’s supply is four times greater, and its total circulation is set at 84 million. You could argue that, given how these cryptocurrencies are normally decimalised substantially, this doesn’t really have much of an impact on the end investor. However, it’s worth remembering about the impact that this will have if they achieve mainstream adoption.

Consumers generally like to deal in whole numbers; this means they’ll know a coffee costs £2 ($2.50, €2.30) or a video game costs £50. If the cost of this PlayStation game was denominated in Bitcoin it would be 0.007 BTC, a figure that can be a little difficult for a shopper to get their head around. In Litecoin, the price would be 1.34 LTC. When it comes to larger purchases, transacting in Litecoin might be easier to understand.

Perhaps one of Litecoin’s biggest advantages is the fact that confirmation times can be substantially lower on its network. Transactions can be processed much more quickly given that a block is verified every two and a half minutes. This is four times faster than Bitcoin’s current offer of 10 minutes.

Those in favour of Litecoin investing point to how this blockchain is more scalable than the likes of Bitcoin and Ethereum. Whereas BTC can handle roughly seven transactions per second, and 0'>ETH can muster 15, LTC is able to process 56 TPS at peak times. As a result, some suggest that Litecoin is more practical for retail purchases – both in terms of capacity and ensuring that merchants can get payments confirmed as quickly as possible.

Is Litecoin a good investment? How it performed in 2019

As the old mantra goes, past performance doesn’t indicate what’s going to happen in the future. However, it can help to answer this all-important question: is Litecoin a good investment in 2020?

Those who chose to invest in Litecoin at the start of 2019 were in for a treat. The first quarter was one of the best in LTC’s history, with its price doubling from $30 to more than $60.

Litecoin to US Dollar
Daily change
Low: 44.35
High: 45.13

New highs for Litecoin just kept on coming. In June 2019, LTC hit $146.43, and at the time of writing, this remains the altcoin’s 52-week high. Quick maths tells us that, in just six and a half months, LTC managed to clock gains of almost 388 per cent, meaning that investors were close to getting their money back four times over.

During this period, a Litecoin investment meant healthier gains than what was on offer from the likes of Bitcoin, which appreciated by 263 per cent over the same timeframe. A Litecoin halving took place in August, reducing the block rewards that miners receive by 50 per cent, but this didn’t seem to have too much of an impact on prices in the immediate aftermath.

It is worth noting that Litecoin couldn’t sustain these astronomical gains, and its price subsequently began to cool as 2019 drew to a close. Nonetheless, those who had a Litecoin investment for the whole year still would have secured a 40 per cent return. Although owners may have regretted not cashing out earlier, it’s still impressive.

Litecoin investing in 2020: a good idea?

Is 0'>Litecoin a good investment now? Well, let’s take a look at how the altcoin has been faring so far in 2020 – and what could be lurking just around the corner.

After starting the year around the $41 mark, LTC did soar to highs of $83.69, following the pattern of doubling in price in the first quarter, exactly as it did in 2019. However, the heat began to leave the market in the middle of February, and like other altcoins, it wasn’t immune to misery of “Black Thursday” on March 12, when LTC fell to $25.57. This was a 38.6 per cent decline on where Litecoin started the year and, worse still, it is a 52-week low.

The debate now turns to: is Litecoin a good long-term investment? After all, it’s only just managed to recover to the levels where it was at the start of 2020. Like other major cryptocurrencies – including Bitcoin – LTC has been facing substantial levels of resistance of late. It’s at a crossroads, and its current price could go either way as the bulls and bears battle for control.

FURTHER READING: Bitcoin explained simply: everything you need to know

A surge in BTC’s value could end up having a positive effect on LTC going forward and, given the fact that the majority of respondents in a recent poll believe Bitcoin is going to hit all-time highs this year, that would be great news for Litecoin investors. Many analysts are predicting that LTC will return to three figures at some point in 2020. Are we about to see the altcoin shoot beyond its all-time high of $375?

FURTHER READING: Litecoin vs Bitcoin

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