If you are unfamiliar with the concept, cryptocurrencies can seem daunting. Interest in cryptocurrency trading has increased dramatically in the past decade or so, with Bitcoin being the focal point of this interest.
Ever since it was released in 2009, Bitcoin has stayed the main force in the crypto universe. Of the many digital currencies that have since been created, more than 20 others are monitored and tracked by news outlets and big financial institutions. These include Ethereum, XRP, Litecoin and Bitcoin Cash.
The two best known cryptocurrencies are Bitcoin (BTC) and Litecoin (LTC) and they are very similar. Litecoin’s developers have in fact always stated that they intend to create Litecoin as the “silver” to the “gold” of Bitcoin.
What are Bitcoin and Litecoin?
Bitcoin and Litecoin are both cryptocurrencies, with Bitcoin being older and the frontrunner in the crypto space since 2009. As such, the two cryptocurrencies have a lot in common.
All currencies backed by governments, such as the American Dollar, the British Pound and the Euro, get their legitimacy and value from legal and political instruments. In contrast, cryptocurrencies only rely on the cryptographic strength of their network. The currencies’ value is determined by the universal laws of supply and demand, as it does with any other product or service globally.
Key Differences
- As at February 24 2020, Bitcoin’s market capitalization (total value of coins in circulation) is more than $176 billion, while Litecoin’s cap is less than $5 billion.
- Although the transaction speed of Litecoin is faster, neither the value nor the usability of the currency is affected by the difference.
- Bitcoin can generate less coins than Litecoin: 21 million versus 84 million.
- Litecoin’s median transaction fee is much lower than that of Bitcoin at $0.0027 USD (LTC) versus $0.257 USD (BTC).
- Litecoin and Bitcoin don’t use the same cryptographic algorithm. Litecoin uses Scrypt, while Bitcoin uses SHA-256.
Cryptocurrency Trading
Although Bitcoin is still the player in the cryptocurrency market that is valued the highest, others like Litecoin, Ripple, and Ethereum are slowly but surely getting there. Cryptocurrencies are all different, and its use cases and partnerships have more importance than the fees and technology behind them, as these factors mainly influence their value.
As cryptocurrencies are not linked to traditional financial markets or countries, they can be traded 24/7. As the crypto market is always open, traders can always make money on the most volatile market globally.
Bitcoin doesn’t update its protocols as often as other digital currencies do, while other cryptos such as Litecoin update their protocols more regularly, and this tends to spark price movement and interest.
There are numerous factors globally that have an effect on crypto markets. This results in constant activity in the markets, and this can be utilized.
With some trading platforms such as Olymp Trade, traders are able to trade crypto assets without the need to move them to a cryptocurrency wallet. This drastically reduces the complexity of making a profit from cryptos.
Conclusion
Cryptocurrencies such as Litecoin and Bitcoin have revolutionized trading possibilities and the way in which money is moved around the world. Exchanges were originally the only way in which access to crypto assets could be obtained, but nowadays trading platforms such as Olymp Trade give traders easier options to capitalize on the only 24-hour market in existence.
Both technical and fundamental analysis are essential to be successful and profit from crypto assets.