What should know about Litecoin before even considering trading in its history? Litecoin, or known as LTC, is a form of cryptocurrency derived from Bitcoin. It was created nine years ago (in 2011), by Charlie Lee, who is an ex-Google employee. His goal was to design a way of payment that would allow faster peer-to-peer transactions and lower fees.
Two years after its appearance, Litecoin gained attention by gaining 100% of its value, surging in a little bit over 24 hours. That was in November 2013, and by the end of the month, Litecoin ‘s market capitalization was worth a whopping $1 billion. Litecoin is now among the top 5 cryptos on the market, while Charlie Lee sold almost all Litecoin that he had back in 2017. Reasons are still debatable, but many say it was because of various accusations that he had a lot of impact on Litecoin for the sake of his gain. Nevertheless, Litecoin is still here, so let’s see what you need to know about Litecoin trading.
Like the Forex and other cryptocurrencies, Litecoin is also decentralized, and it operates thanks to an open-source cryptographic protocol. What makes it “better” than Bitcoin is the fact that it’s not so hard to mine it, and it uses a different type of blockchain. That’s where you will often see the term “fork of the network” since it underlies BItcoin. It has slight differences in algorithms that make it more capable of producing more massive amounts of coins. If you like uncomplicated, cheap, and fast transactions, Litecoin might be just right for you. Bitcoin relies heavily on security strength during exchanges, and that’s why you don’t see Bitcoin transactions as often as Litecoin. It would be best if you considered Bitcoin and Litecoin as complementary currencies, not competitive ones.
Contract for Difference (CFD) Trading
A CFD is a type of financial contract, which usually occurs between a broker and an investor. The catch is that one side should agree to pay the other side the difference in the value of a security that happens between the opening and closing of one trade. This means you can use a holding strategy, where you observe and assume when the price should rise and then act, or short sell it if you think the price will fall. CFD is made for short trading time frames, so it is a good option.
Many people tend to forget about the existence of crypto wallets, but let’s not forget about their value. Since cryptocurrency is a digital type of asset, you can secure it better by storing it in a digital kind of wallet, which can be an online wallet or even an offline crypto wallet. It’s even possible to keep it in hardware, but that’s less recommendable than the first two options.
Other types of Litecoin trading
There are four more ways you can trade Litecoin, and we will briefly explain them here:
- Margin trading gives you access to the crypto market using CFDs, and chances are 2:1 for one crypto.
- Trading the difference means you are not buying any underlying asset, but you still have a particular connection to it. Don’t think of CFD as a different type of trading when it comes to your crypto trading strategy, because like we said before. It can be traded long and short. You can also set stop and loss limits and so on.
- All-round trading analysis: You can easily find platforms or even applications where you can see forecasts and how other traders are doing. This can give a profound insight into how you should act if you are new to Litecoin trading.
- Stay safe – be sure, like with any other type of trading, to find the right brokerage that is certified, and available 24/7. That should always be a priority.