Litecoin is a leading cryptocurrency that was established in 2011. The cryptocurrency’s goal was to address some of the biggest challenges that Bitcoin has. For example, because of the network congestion, Bitcoin is known for having significantly high network costs. Also, its transactions take a substantially longer period to complete.
Litecoin uses a proof-of-work technology, meaning that it is mined by solving complex mathematical solutions. Unlike Bitcoin, its platform is significantly faster and the overall transaction costs are relatively low. Also, while Bitcoin has a supply cap of 21 million coins, Litecoin has a limit of 84 million. In this article, we will look at some of the available options if you want to buy Litecoin safely in 2022.
Litecoin performance
Like all cryptocurrencies, Litecoin has had a difficult start to 2022. In the third week of the year, the coin tumbled to a low of $96.50, which was the lowest level since December 2020. At its peak in 2021, the coin was trading at about $500, meaning that it has not been a good investment.
Another thing that happened in the final half of the year is that Litecoin lost its correlation to Bitcoin. For a long time, the prices of the two coins tracked one another. This was partly because Litecoin has always been the cheaper option.
For example, while Litecoin is trading at $96, Bitcoin is trading at over $36,000. Therefore, for many traders, Litecoin was the better alternative to buy.
There are two primary reasons why the Litecoin price has retreated sharply in the past few months. First, there are concerns that major central banks like the Federal Reserve, Bank of England, and European Central Bank (ECB) will embrace a more hawkish tone in 2022 because of the rising inflation. Historically, rising interest rates tend to affect risky assets.
Second, with cryptocurrencies becoming popular, there are risks that the countries will curtail the sector. For example, the Indian government is considering a bill to ban the currencies. Also, there is a likelihood that Russia will also introduce more regulations.
Buying Litecoin using a centralized exchange
The most common approach to buying Litecoin and other cryptocurrencies is using a centralized exchange like Coinbase and Binance. These are companies that enable people to buy a variety of cryptocurrencies using their web and mobile platforms. They charge a small commission to facilitate the transaction.
The process of buying Litecoin using a centralized exchange is relatively simple. You just need to find a good exchange, create and verify your account, and then fund it. You can fund the account using a credit or debit card or by doing a bank transfer. After doing this, you should select the currency that you want to buy and then execute the order. You will then receive your coins and store them in the exchange’s wallet.
Buying LTC using a decentralized exchange
The second option is that of using a decentralized exchange (DEX). A DEX is a platform that is run by the community. A centralized exchange, on the other hand, is run by the company’s management. Since they are driven by profits, the management will often charge fees. In a DEX, the fees generated are shared among the token holders.
There are hundreds of decentralized exchanges in the marketplace today. Some of the most popular ones are IDEX and Uniswap.
To buy Litecoin using a DEX, you first need to find one and then create an online wallet. Metamask is one of the most popular online wallets in the world. After this, you will just complete the transaction. If you own cryptocurrency already, you can swap it using the DEXes.
Using online wallets to buy Litecoin
Another safe option of buying Litecoin safely is to use an online wallet. Recently, many companies offering wallet services have started offering cryptocurrency services. For example, in 2021, PayPal announced that users will be able to buy, store, and sell cryptocurrencies on its platform. The service is now available in countries like the US and the UK.
Similarly, Skrill, a company owned by PaySafe has also been offering these cryptocurrency services for years. The same is true with other platforms like Cash App and Venmo.
To use these products, you just need to have funds in your online wallet. After that, you can just select the cryptocurrency option and then complete the transaction. In most cases, it will typically take less than a few seconds to complete the transaction.
Summary
Cryptocurrencies have gone mainstream, meaning that it is now easier than ever before to buy any coin that you want. In this article, we have looked at the recent performance of Litecoin and identified some of the best options available to buy it. You need to select an option that is safe and relatively cheaper for you.