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Litecoin, a cryptocurrency adapted from Bitcoin to facilitate digital payments, is one of the most widely available digital assets. Many top crypto exchanges and platforms allow users to buy Litecoin.
There are several ways to get Litecoin, including:
While Litecoin was developed to be a form of payment, some users also buy it as an investment in hopes that its value will rise. Over time, Litecoin’s price has increased, though it also has seen several shorter-term declines.
» Learn more: Get the basics on Litecoin.
If you decide to buy Litecoin, here are some things to think about.
How to buy Litecoin in 5 steps
1. Decide whether Litecoin is right for you
The first question you’ll want to ask yourself when considering Litecoin is a simple one: Should I buy Litecoin? Of course, the answer will be different for everyone, but there are a few considerations.
If you decide to invest in Litecoin, you should have a well-thought-out idea of why you think it will grow in value long term. If you want to use it for payment, it’s a good idea to consider where you can spend it and why you view it as superior to traditional currency and other cryptos.
Many other cryptocurrencies are working on payment methods as well, and merchants that accept Litecoin may also take cryptos such as Bitcoin.
More broadly, there are thousands of cryptocurrencies, all competing for the same investor dollars. And beyond crypto, there are many other investments such as stocks, bonds or real estate that you might want to consider.
2. Choose how to get Litecoin
If you’re new to crypto, one of the simplest ways to buy digital assets is through cryptocurrency exchanges. There are a growing number of options on the market.
If you’re familiar with stocks and already working with an online stockbroker, you can check to see if it offers cryptocurrency.
Another way to buy crypto is through crypto exchanges, which make matches between buyers and sellers. They make money largely through fees on the transactions carried out on their platforms. Many sell Litecoin either for cash or in trade for other digital assets.
While there are other options, such as receiving Litecoin as payment or mining Litecoin, these are likely to require more legwork for a first-time buyer.
3. Decide how to pay
When buying Litecoin, you’ll often have the option of paying in cash or cryptocurrency (though some platforms will only accept cash).
Paying in cash will be your only option unless you already own crypto. You’ll have to decide how to move money into your account. Major exchanges generally allow users to pay through bank transfers, such as automated clearing house transactions.
Many also allow users to buy crypto with credit cards. Be aware, however, that using high-interest debt such as credit card balances to buy a risky asset like crypto could deepen your losses if your investments decline.
And keep in mind that exchanges charge different fees for various payments, so do your homework before clicking “buy.”
Paying with cryptocurrency is an option if you already have some digital assets in your portfolio and want to buy Litecoin without increasing your overall exposure to crypto. Exchanges vary widely in the crypto trading pairs they offer, but many do offer trades, including Litecoin and other assets.
A potential complexity of trading in crypto is that these assets may change in value at different rates. The amount of Litecoin you can get in exchange for a certain amount of Bitcoin, for instance, may change from day to day.
4. Make your purchase
Exchanges have done a lot of work to make buying crypto easy. But, unfortunately, in some cases, it’s so easy that you can make a costly mistake if you’re not careful.
Usually, all you have to do is look up the asset you’d like to purchase, type in the amount you want and confirm your transaction.
When you’re buying Litecoin, it’s a good idea to triple check the dollar value of your purchase and to make sure you actually selected Litecoin. Then, once the transaction is complete, you can check to ensure it went through.
5. Store your Litecoin safely
Most exchanges will hold your crypto for you, which can be a convenient option. But exchanges can also be targets for cybercriminals.
If you want more control over your crypto assets, you can hold them yourself in what is known as a crypto wallet.
These products store your private keys, similar to passwords, that allow you to spend or move your assets around. Without your private keys, you can’t use your crypto. If you only want to store Litecoin, and not multiple cryptocurrencies, a Litecoin-specific wallet could be a good fit.
There are two major types of crypto wallets.
A hot wallet is connected to the internet and can be accessed anywhere. This is a useful feature, but it may also mean your assets are more exposed to hackers or thieves.
A cold wallet stores crypto offline. These can be expensive and more difficult to use, and they offer fewer options for restoring your account if you lose the device on which you stored them. But they do provide another layer of security against theft.
The author owned Bitcoin at the time of publication.