Litecoin (or LTC, in short) is one of the most popular cryptocurrencies on the market, with some viewing it as a viable alternative to Bitcoin. Released back in 2011, way before the cryptocurrency started showing its first signs, it has since become the altcoin with the 7th biggest market capitalization.
Even with Litecoin’s surprising rise, people are wondering why they should invest in this crypto and, more specifically, with CFDs. For this purpose, we will list a few reasons why trading CFDs with Litecoin is a smart investment opportunity that everybody should consider.
A contract for difference, simply know as a CFD, is a legal contract between two parties – the buyer and seller -, wherein the seller guarantees that the buyer will receive the difference in the value of the CFD on the sale of the contract.
CFDs come with a wide array of great trading opportunities, mainly because it does not involve an actual owner of the security per se, or a delivery of physical goods (oil, gold, silver, for instance). A CFD’s purpose is to allow the trader to take advantage of market volatility and price changes without owning the asset in the traditional sense. This allows investors to take order sizes that are not bound by certain limits.
CFD trading, initially reserved for stocks and forex, is slowly protruding the cryptomarket as well. As of October 2018, Admiral Markets expanded its cryptocurrency offer with new CFDs, adding new coins to its portfolio such as Stellar Lumens, Ethereum Classic and Eos. In addition to this, the London-based broker will allow its clients to pair cryptocurrency CFDs against the euro currency.
So, what does this mean for trading Litecoin CFDs? There are many future implications, all of them positive.
There are many reasons to give cryptocurrency CFDs a spin, as trading under the contractual obligations of a CFD can give investors an edge over those who prefer a more traditional approach. Let us take a look at a few advantages of trading Litecoin through CFDs:
- Instantaneous order execution, which essentially eliminates slippage and other issues traditionally associated with Litecoin.
- The option of adopting both a long and short option when trading Litecoin CFDs. Since this year has been marked by dozens of bouts of votility, investors have an additional incentive to sell orders to go short and purchase orders to go long on Litecoin, depending on the market realities.
- Leverages are very high, with some brokers offering a whopping ratio of 500:1.
- The CFD transactions are perfect for people who are looking for cheap, reliable options.
- There is no need to identify and download a wallet compatible with Litecoin or purchase the coin on a crypto exchange and transfer the funds on another wallet to avoid attacks by hackers. Trading through CFDs is very safe and straightforward.
- Investors do not have to buy Litecoin on an alternative exchange that supports Bitcoin/Litecoin pairings. The Litecoin CFDs can be purchased with fiat money, significantly simplifying the process.
Litecoin is one of the fastest growing altcoins on the market. In the past year, Litecoin outperformed both Bitcoin and Ethereum, with appreciation values reaching more than 8,000 % at the end of 2017. Therefore, it is safe to assume that Litecoin will rise way beyond 2018 and will become one of the big players of the cryptocurrency market.
But how exactly, and in which areas, will Litecoin continue to expand? For starters, judging by its evolution, its rate of adoption should increase exponentially. However, it is worth mentioning that Litecoin’s evolution is intimately linked to that of Bitcoin, as an increase in Bitcoin usage influences the rate of adoption of altcoins.
Litecoin is not called the silver to Bitcoin’s gold without reason. When Litecoins were first released to the public, Charlie Lee, their creator, envisioned them as a day to day currency used for regular transactions, whereas Bitcoin would gradually become a means to store value, like gold. Currently, Litecoin sits at roughly $60 per coin. However, it is expected to close around $600 until the end of 2018.
The reasons are as diverse as one would expect. However, if we had to choose the one that holds that most weight, it would be the fact that Litecoin is preferred by savvy investors who want to extend their portfolio and exploit its untapped potential. Furthermore, Litecoin is an open source project, meaning that the coin is designed from the ground up to accommodate tech improvements. Some people might even call Litecoin an improved version of Bitcoin for this sole reason.
Adding to this list is the fact that, even by crypto standards, Litecoin is very transparent, with many people having moved away from Bitcoin in favor for Litecoin since its popularity surged at the end of 2017.
Litecoin has the potential of becoming the go-to altcoin on the market and judging by its recent evolution, it is very had to argue against this statement. In addition to the versatile and open-source nature of Litecoin, trading Litecoin through CFDs has never been more fruitful because traders are allowed to take higher leverages and adapt their short or long position as the market is changing, without suffering dire consequences. In conclusion, trading Litecoin through CFD has never been better – and it will continue to be so for the near future.
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