With new cryptocurrencies seemingly showing up every day, it’s sometimes hard to know which are worth buying and which should be avoided. One of the best-known currencies is Litecoin, which was one of the earliest competitors to Bitcoin.
Before you buy or trade Litecoin, you must do your research beforehand. Besides understanding the risks involved, you also need to understand that “buying” and “trading” do not mean the same thing.
If you’re currently scratching your head, don’t worry — this page has all the information you need before you buy Litecoin in 2021. We’ll cover the difference between buying and trading, where you can buy Litecoin online, how to trade Litecoin, and much more.
Best brokers to buy Litecoin through in 2021
These days, you’ll find several brokers where you can buy Litecoin. When picking one, several factors will come into play. You’ll notice that the fees involved differ, as do the selection of cryptocurrencies you can purchase. Numerous different ways to buy Litecoin exist, but we’ve made it easy for you by listing the best providers below:
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
What is the difference between buying and trading Litecoin?
When researching Litecoin online, you’ll find a lot of information about buying and trading the currency. If you don’t have prior knowledge of (or experience using) cryptocurrencies, you might think that both mean the same thing. However, this isn’t the case.
Below, we’ll break down the difference between buying and trading Litecoin:
Buying Litecoin: When you buy a Litecoin, you own the asset and pay full market value for it. After purchasing, you’ll have to store the coin in a digital wallet. If you make a profit on the Litecoin you’ve bought, you’ll need to declare it as capital gains tax and pay accordingly. In general, you’d buy a Litecoin if you’re looking at the long-term game.
Trading Litecoin: Unlike buying Litecoin, you don’t need to pay the full market value when you trade one – since you don’t officially own the coin. Trading Litecoin also means that you won’t pay capital gains tax on any profits you make, nor will you need to set up a digital wallet. You might prefer to trade Litecoin if you’re going for a more short-term strategy but are by no means restricted to doing so.
How to buy Litecoin online
If you decide that buying Litecoin is a better option than trading, it’s time to start looking for an exchange.
While the research phase is a little time-consuming, buying Litecoin in and of itself isn’t a complicated process. All you need to do is follow the steps below:
Decide on the exchange you want to use and visit its website or mobile app
Sign up and verify your identity
Add money to your account to fund your purchase
How to trade Litecoin
Buying Litecoin isn’t the right approach for everyone, and that’s okay.
If you’ve decided that you’d prefer to trade the currency, remember to have a well-defined strategy before you invest any of your time and money. You can trade in several ways, such as spread betting or contract for difference (CFD) brokers.
Once you’ve decided on your Litecoin trading strategy, follow these steps to get started:
Look for a broker that you like and allows you to trade Litecoin
Sign up to your broker of choice and verify your identity
Deposit money into your account
Choose to trade your Litecoin
After you’ve begun trading, you can sell whenever you feel the time is right.
What are the different ways to pay for Litecoin?
When looking to buy or trade Litecoin, one of the most important things that you need to choose is which payment method you’ll use. Fintech has evolved drastically over the last decade or so, meaning you’ve now got several choices when you’re ready to get started.
Below, you’ll find a list of the different ways you can pay for Litecoin once you’ve signed up for a cryptocurrency exchange.
Debit cards are some of the oldest ways to make online purchases but have stood the test of time because they’re so reliable. When buying Litecoin, you can use both Visa and Mastercard to fund the purchase. You’ll find debit card payments available on almost every reputable crypto exchange.
Safe and reliable
Easy to use
Could affect your credit rating
Fees are typically high
Owned by UK-headquartered Paysafe, Skrill has millions of users spread across the globe. This digital wallet has proven its openness to cryptocurrencies, offering fiat-to-crypto withdrawals in the European Economic Area (EEA) since 2021. Skrill provides an easy way to buy and sell Litecoin in the app and is accepted as a payment method on various crypto exchanges.
Easy for buying and selling Litecoin
Participate in Skrill’s reward scheme when you use your wallet
Can’t transfer to other Skrill users or use your crypto at online merchants
Buying and selling services not yet available in all markets
PayPal has been around since 1999 and was one of fintech’s early pioneers. Well over 300 million users worldwide use the company’s digital wallet. PayPal offers cryptocurrency services in the U.S. and UK, and you can fund your crypto exchange account using the service in many cases.
Easy to sign up for an account
Withdrawal limits with some crypto exchanges
Not available with every crypto exchange site
You can also buy Litecoin using your credit card, and the process isn’t drastically different from using a debit card. The only difference in a practical sense is that while a debit card uses funds you currently have, a credit card does not. You can use your credit card to fund a Litecoin purchase in most places that accept Visa and Mastercard.
Easy to use
High transaction fees
Could affect your credit score
What to consider when buying Litecoin
Buying Litecoin isn’t as simple as signing up to a cryptocurrency exchange and making your purchase. You need to think about several other factors, such as fees and regulations. To save you time scrolling through countless pages and Google searches, we’ve listed the essential points of consideration below:
Volatility: Cryptocurrencies are well-known for being volatile, and Litecoin is no exception. When buying or trading, it’s important to remember that the currency’s value can wildly increase or decrease in little time.
Deposit Fees: Depending on the cryptocurrency exchange you use, you might need to pay a fee each time you deposit. These vary, so it’s worth doing your research before committing.
Trading Fees: If you choose to trade Litecoin instead of buying it, you need to keep trading fees in mind. Again, these will differ depending on the exchange you use, so it’s worth investing the time to assess your options.
Regulations: Depending on where you live, you might need to factor in local laws when buying or trading Litecoin. For example, North Macedonia has banned all cryptocurrencies, and Nigeria has outlawed cryptocurrency exchanges. Make sure that it’s legal to buy and use Litecoin where you live before purchasing or trading.
Availability: Litecoin is one of the largest cryptocurrencies in the world. As such, you can buy it at several exchanges.
Long-term Holding (HODL): Many cryptocurrency experts have identified Litecoin as one of the best long-term purchases. While no currency is 100% reliable, it’s more reliable than others on the market.
Short-term Holding: Litecoin has had a couple of big crashes, notably in 2018 and 2021. Since its crash in May, it has steadily recovered.
Maximum Circulation: Despite being digital currencies, cryptocurrencies have a circulation caps. Litecoin’s is 84 million.
Is it safe to buy Litecoin online?
Buying Litecoin is safe if you do so from reputable cryptocurrency exchanges. However, cryptocurrencies are prone to scams, and you need to take the appropriate action to protect yourself.
Besides using an official change, you should create a digital wallet – even if you only plan on trading. This way, you’ll have a secure place to store your Litecoins.
When you sign up for a crypto exchange, the exchange will perform a know-your-customer (KYC) check. You’ll get asked for information to verify your identity, such as your name and address. Do not pass on more information than you need to. If someone asks for your debit card PIN, for example, it’s almost certainly a scam.
After you’ve bought Litecoin or begun trading, you can add an extra layer of security to your account at whichever broker or exchange you choose. Two-factor authentication (2FA) is the best way to do this. Consider setting up fingerprint sign-ins, verifying via SMS, or asking a (hard-to-guess) question.
How to store Litecoin
After you’ve bought Litecoin, we recommend that you store these in a wallet. This is advised for several reasons, including:
Stopping hackers from stealing your Litecoins
Preventing your computer from getting infected with malware
You’ve got several options when it comes to storing Litecoins. Some of the most popular choices are:
Cold Wallets: Can take the form of either a hardware or paper wallet. Cold wallets are not connected to the internet, which can increase security.
Software Wallets: These wallets are stored on your computer, smartphone, or on a website. For desktop and mobile wallets, you’ll need to download an app.
How to sell Litecoin
To sell your Litecoin, you’ll need to start a new selling order. After that, you’ll get whatever the value of the coin is at that given moment.
You can sell Litecoins in several ways, including:
Trading Broker: If you bought Litecoin via a broker, you could also sell your shares there. When you do this, you’ll get the value of your coin at its current market rate.
Fiat-to-crypto Exchanges: With a fiat-to-crypto exchange, you can sell your Litecoin for a real-life currency – such as the U.S. Dollar. Exchange rates vary, so keep this in mind.
Is it worth buying Litecoin right now?
Cryptocurrency markets are volatile, and buying any coin carries risks. Litecoin is no different, as shown by the most recent crash in May 2021.
Litecoin is a worthy investment to consider if you’re looking at the long-term game. The coin’s growth has been relatively stable in recent times and costs much less than the likes of Bitcoin.
Over the next five years, experts predict that Litecoin will continue to rise in value. So, it’s worth thinking about an investment.
Litecoin provides a kind(ish) introduction to cryptocurrency buying. The coin’s long-term outlook is good, and there are several exchanges and brokers you can use to get started. The best way to buy Litecoin is using a digital wallet, which will likely reduce your fees and offer a more significant level of anonymity than your debit or credit card.
Can I buy Litecoin in any country?
If you live in the US or UK, you can buy Litecoin. Whether you can buy it elsewhere depends on your local restrictions.
Is there a limit to how much Litecoin I can buy?
This will depend on where you buy your Litecoin. Some exchanges place daily deposit limits. For example, Coinbase has a $25,000 daily limit.
Can I buy Litecoin without an ID?
Not from somewhere safe, no. To buy Litecoin, you’ll need to pass a KYC check for the broker, payment service, or exchange you use.
Can I buy Litecoin instantly?
Yes. Litecoin purchases are usually instant once you’ve approved the transaction.
What is Litecoin?
Litecoin is a cryptocurrency formed in 2011 by Charlie Lee – a former Google employee. The coin was designed to fill gaps that Bitcoin was perceived to have.
How does Litecoin work?
Litecoin works like any other currency. You can use it to purchase with merchants who accept the coin.