Is Litecoin a Good Portfolio Option for First-Time Crypto Traders?
After Bitcoin showed huge potential, crypto industry experts realized that similar projects could also generate success. Litecoin is a digital payment currency whose inspiration was BTC. Charles Lee used Bitcoin’s code to create this worldwide payment network that utilizes blockchain technology. He made several adaptations with the goal of achieving better transaction speed and overall efficiency.
For decades, LTC has maintained a high position in the crypto rankings. Is that enough to buy Litecoin today? It’s a good question, and our experts answer it in this article. We covered LTC basics and different analysis types to provide an answer.
What Is Litecoin?
Charles Lee, the creator of Litecoin, worked at Google when he designed the LTC blockchain in 2011. Considering that Bitcoin was the source code used for Litecoin, some similarities exist. LTC is also a payment method and a digital currency that serves for fast and simple international transactions.
Decentralization is an important Litecoin’s feature. The network manages to have a 2.5-minute block generation time, which is approximately four times faster than Bitcoin. It uses the Scrypt algorithm, which is a change compared to the BTC’s SHA-256 protocol. Litecoin also uses mining to generate new coins, and halving events occur every 840,000 blocks.
Litecoin first adopted the Segregated Witness feature, which enabled better network scalability. LTC also implemented the MimbleWimble privacy protocol that protects transfer details to maintain confidentiality.
Litecoin 2024 Market Performance Analysis
You can now find 74 million LTC tokens in circulation, which is around 89% of the maximum supply set at 84 billion. Litecoin has a market cap of over $5.6 billion, placing it in the top 20 currencies in the crypto rankings. Here is what analysis reveals about LTC and its potential.
Fundamental Analysis
On July 1st, 2024, Litecoin’s worth is around $75.12. The coin wasn’t successful much in the previous month or year. Furthermore, if we analyze the last 12 months, LTC dropped from $113.23 to today’s value.
If we compare the current value to Litecoin’s all-time high from 2021, when it was $412.96, we see that it has lost over 81% of its worth. Many currencies have suffered a hit since then, so this ratio isn’t something you should be scared of too much. An encouraging factor is the trading volume, which is still above $266 million daily.
Technical Analysis
You can use different technical analysis tools, including utilities, to adjust the parameters to get the desired indicators. As for Litecoin, Investing.com offers technical analysis for different times, ranging from five minutes to monthly statistics.
And that’s the best example of how the same tools can show different statistics if you adjust the timeframe. A five-hour technical analysis clearly shows that you should buy LTC:
On the other hand, weekly indicators advise a strong sell:
The overall conclusion is that Litecoin has been having some problems with performance in the previous week. However, the latest hours showed that LTC is making a comeback. That indicates this moment was the right one to invest in Litecoin and use its growth potential.
You might also encounter the following situation where you get mixed feedback from technical indicators.
The table above shows us that there are indicators that recommend buying Litecoin and others that warn against it. But if we check the overall results, we see that the majority is on the side that purchasing LTC is a good idea at this point.
Sentiment Analysis
You might have heard about the Crypto Fear and Greed Index (CFGI), which analyzes the sentiment around a particular cryptocurrency. At this point, the CFGI for Litecoin is at 40%, which means its index rating is “Neutral.”
That index means now might be a good time to invest in Litecoin, especially in the long run. CFGI explains that the 40% rating is close to the “Fear” sentiment. The rating updates every 15 minutes, and checking out the history shows that it slowly increases. You will notice that there’s a negative opinion among whales, but the social and search indicators are close to a positive. Some experts analyze this as the beginning of an uptrend after a downtrend, so these moments are great times to pick LTC for your portfolio.
Pros and Cons of Investing in Litecoin
Expert opinions about the LTC price prediction for 2025 can be meaningful when deciding about investing in Litecoin. But beyond the price patterns, here are some valid reasons to acquire LTC:
- Active De-Fi integration. Litecoin is a decentralized payment method that has been actively looking for ways to integrate with DeFi apps and services. LTC-20 tokens are now available for creation on the Litecoin blockchain, an option that developers could utilize to implement LTC-supported coins in their apps.
- Reduced mining decentralization risk. Bitcoin is prone to ASIC mining dominance due to its specific algorithm. Litecoin creators designed the Scrypt protocol with the goal of avoiding this issue and making mining attractive to everyone interested.
- The first network to adopt SegWit and Atomic swaps. Many Bitcoin upgrades first arrive on the Litecoin chain. These updates enabled LTC to enhance transaction speed and efficiency by keeping transaction information separate from the signatures.
We should also mention a couple of reasons why you should be cautious when investing in Litecoin:
- Not too many technological advancements. The tech progress isn’t that comparable to newer cryptocurrencies. Many experts already see LTC’s technology as relatively conservative.
- Restricted ecosystem development. Although the ecosystem exists, it’s hard to compare it with Ethereum and other more versatile platforms.
Should You Invest in Litecoin?
Litecoin has a strong history, and it’s been a part of the crypto world for over a decade. It maintained a reputable position for years, but the analysis shows that LTC has had a rough period lately.
Despite the coin’s lost value in the previous 12 months, technical tools show it might be ready for a comeback. That makes Litecoin a worthwhile consideration for your portfolio at this point. Price predictions are also encouraging, making LTC a potentially wise long-term investment. Make sure to check all factors you find relevant yourself and then decide if Litecoin is the right choice for your portfolio.