Best Litecoin Trading Brokers 2018
In this article, we will explore Litecoin the cryptocurrency. We will look at the best brokers that offer the trading of this currency and also accept it as a payment method.
What is Litecoin?
- What Led to the Creation of Litecoin?
- Litecoin Trading Explained
- How to Buy Litecoin
- Speculative Trading of Litecoin
- Litecoin Trading Sites, Brokers, and Software
Litecoin is a peer-to-peer globally decentralized cryptocurrency which enables users to make payments to anyone in the world instantly and at near-zero payment costs. Created by Charlie Lee and with a market capitalization of $3.28billion (data source: Coinbase), Litecoin is based on open source technology. The network on which Litecoin runs is secured using complex Mathematical calculations. Litecoin was built to offer a cryptocurrency which could offer improved speed of transactions, faster confirmation times and better storage efficiency than Bitcoin.
What Led to the Creation of Litecoin?
The original concept behind the creation of Litecoin was to setup a system of payments without centralized control by a government agency. To be able to adapt itself to this purpose, it was necessary to have a cryptocurrency that could offer fast transaction confirmations. Bitcoin’s average confirmation time is about 30 to 100 minutes, depending on the location of the wallet. The Litecoin blockchain is a vast improvement on this metric, with the capacity to handle higher transaction volumes than Bitcoin. The Litecoin network is also designed to permit more frequent generation of new blocks, which allows the network to support more transactions without the need to modify the software too radically in future. This has also cut down the transaction confirmation time to just 2 minutes.
As a result, merchants who offer Litecoin as a payment method can get faster confirmation times for transactions on their e-commerce portals, while still being able to await more confirmations for transactions on bigger ticket items.
Litecoin Trading Explained
Litecoin can be acquired using any of the following methods:
- Just like the other cryptocurrencies, Litecoin lends itself to mining, which is the primary method by which this cryptocurrency is generated. The reward for mining presently stands at 25 new Litecoins for each new block generated. Mining consists of solving the complex Mathematical calculations, which creates a new block for each correct solution. Successive mining attempts get more difficult and give lesser yields, as the amount generated by mining is reduced by half every four years.
- You can purchase Litecoin and store it in your Litecoin wallet. Usually, this is done through exchanges that offer Litecoin for sale.
- There are also traders who will prefer to make money from Litecoin without holding the asset itself. Usually, such traders will pay a visit to the forex platforms that offer Litecoin as a CFD asset, usually in a pairing with the US Dollar (LTC/USD).
Litecoin has benefitted from the bull market in cryptocurrencies and after a lull period has gained 1,400% in 2017 (data current as at August 29, 2017). Plans are presently underway to develop the Lightning Network, which is going to be the new network on which the Litecoin blockchain will run. This will cut transaction confirmation times of Litecoin from 2 minutes to a few seconds, making it more adaptable to its originally fashioned use as a payment currency.
How to Buy Litecoin
The easiest means of acquiring Litecoin is to buy it from an exchange or from other Litecoin holders. Not many people have the resources to mine litecoins. Buying Litecoin from an exchange can be done using:
You can buy Litecoin from designated exchanges using your regular everyday legal tenders such as US Dollars or Euros. Buying Litecoin with fiat currency can be done in two ways.
- Direct Litecoin purchase (Fiat currency -> Dash) on exchanges which permit such direct routes of purchase.
- Indirect purchase (Fiat currency -> transferred to exchange -> Used to purchase Litecoin from other users on the exchange)
Due to the view of different country regulators on the exchange of fiat currency for cryptocurrency, funding of your account for the purchase of Litecoin is not always a straightforward process. The following methods of sending fiat currency to exchanges for Litecoin purchase are as follows:
- Credit/debit cards which are linked to a bank account.
- PayPal (selected countries only).
- Digital currency wallets such as Skrill, Moneta, PaySafe, GiroPay, Neteller, OKPay, WebMoney, etc.
- Direct Bank transfers using the SWIFT or SEPA system.
You must check the rules regarding transfers of fiat currency to a cryptocurrency exchange from your country before you engage this method. You must especially be careful to ensure you are not breaking any laws. Also be aware that you will be charged a commission anytime you transact on your Litecoin wallet. You must consider this when choosing a payment method with which to fund your Litecoin account.
Buying Litecoin from Other Users
Buying Litecoin from other users using off-exchange methods is becoming a popular means of acquiring Litecoin. This involves transferring of Litecoin from one user’s wallet to the wallet of another user, with the recipient paying for the Litecoin cache using fiat currency or another cryptocurrency. This is a more risky way of trading Litecoin as there is no escrow protection for buyers of Litecoin. However, the elimination of transaction fees which are charged by exchanges seems to be the attraction for this model of trading.
Speculative Trading of Litecoin
The volatility in the price of Litecoin seen in 2017 has lent the cryptocurrency to online trading, where traders can profit from the differential in prices. Litecoin can be traded in the Over-the-Counter (OTC) market on exchanges or traded as a Contract for Difference (CFD) asset on forex platforms. Buying or selling Litecoin on the OTC market involves using exchanges that are designated for this purpose.
Trading Litecoin on the OTC Market
Some Litecoin exchanges offer the opportunity to buy, hold and resell Litecoin for profit. This requires that the trader owns a Litecoin wallet where the cryptocurrency will be held. You can download a wallet from third party companies on the app stores, or you can get one setup for you from the exchanges themselves.
In order to commence trading, fund your wallet with fiat currency, or using Bitcoin or Ethereum. Funding conditions will differ from exchange to exchange.
Trading Litecoin as a CFD
Forex platforms have begun to offer contracts which feature Litecoin as a pairing with fiat currencies. The commonest pairing is that of Litecoin against the US Dollar (LTC/USD). Spreads are typically large and traders need to have well-funded accounts to cope with the margin requirements.
LTC/USD is amenable to trading using technical and fundamental analysis. As an example of a fundamental trigger and a technical entry, this is the chart of LTC/USD as it responded to the news of the Chinese ban on issuance of new ICOs from the country.
Trading Litecoin as a CFD asset requires a sound knowledge of technical analysis. Trading Litecoin as a CFD has some advantages:
- You are allowed to use leverage, which enables you setup large positions with a smaller amount of money and still reap the full profits of the leveraged position. Some platforms may even offer up to 1:400 leverage, requiring the trader to come up with just 2.5% of the total amount required to setup the position.
- Trading of Litecoin is continuously done every day of the year, providing continuous trading opportunities.
- You can engage the services of signals providers, or companies that provide Litecoin copy trade services. There are now several of them in the market that provides buy and sell entry/exit points for the LTC/USD pairing.
Litecoin Trading Sites, Brokers, and Software
The purpose of this article is to show you how to trade Litecoin for money. You may decide to use a Litecoin exchange, which is where you can buy Litecoin using fiat currency, digital currencies or other cryptocurrencies (commonly Bitcoin), and resells for profit when prices move up. The strategy is to purchase at lower prices, hold for appreciation of price and resell for a profit. This method depends on buying when prices have pulled back to a level deemed as being cheaper to buy with a lot of upside room. The key distinguishing factor between this model of trading and the trading of Litecoin as a CFD asset is that gains can only be made when prices rise. Short-selling of LTC is not possible on these exchanges.
There are also exchanges where traders are allowed to trade Litecoin as an OTC asset, usually on margin. By allowing the use of leverage, these exchanges offer traders an improved service beyond the regular exchanges offering “buy and hold” models of trading.
This is an improved model of Litecoin trading because it allows traders to short the asset. However, a lack of charts and technical tools for analysis makes it hard to know exactly when to enter and exit positions. So the trader is still exposed to a lot of risks.
The final model is trading Litecoin as a CFD asset. Usually, this works on forex platforms where traders are given access to charts and technical tools, which enable the precise setting of entry and exit points with good reward-risk ratios. This model also permits the shorting of Litecoin and ability to trade with leverage.
Several factors must be considered when choosing an appropriate model for your Litecoin trading:
- Consider what payment methods you can use from your location, and the cost implications.
- Does the exchange/brokerage you want to use have a good track record when it comes to speedy fulfillment of withdrawal requests?
- Are you good at technical analysis or do you have access to good signals services which employ technical analysis for trade decisions?
- Is the exchange or brokerage amenable to use of automated trading services/robots?
The answers to these questions will guide you on how to choose the best Litecoin exchange for your business.
In conclusion, we present the best Litecoin trading brokers for 2017. Whether you choose to buy and hold Litecoin with the aim of reselling it for profits in future, or you simply want to acquire Litecoin for making payments, you definitely need to acquire an initial amount of the cryptocurrency. To do this, you need to come up with brokers or exchanges that will enable you to acquire your first consignment of Litecoin.
This list of the best Litecoin exchanges and brokers for 2017 features brokers and exchanges that meet the following criteria:
- Well regulated, with a clean track record.
- Brokers who fulfill withdrawal requests with no stories involved.
- Brokers with a transparent pricing of Litecoin contracts.
- Brokers that allow the use of trading robots to trade the Litecoin CFD assets on their platforms.
- Exchanges and brokers that offer great security against cyber threats to Litecoin holders.
- Exchanges and brokers that offer several means of payment for greater inclusiveness among nationals of various countries.
- New Zealand
- South Africa
- South Korea
- Hong Kong
- United Arab Emirates
- Russian Federation
List of Brokers
|BROKER||USER RATING||REGULATED BY||HEADQUARTERS||MIN. DEPOSIT||OFFICIAL SITE|
|ASiC, CySEC, FCA||Israel||$100||Open Account|
CFD Service. 80.6% lose money
|ASiC, BVI, FSA(JP), FSB, MiFID||Ireland||$100||Open Account|
Your capital is at risk
|CySEC, FCA||Cyprus||$50||Open Account|
Your capital is at risk
|CySEC, FSB||Cyprus||$100||Open Account|
CFDs carry risk. 73% of traders lose
|BaFin, FCA||United Kingdom||$300||Open Account|
Your capital is at risk