What is Litecoin and how to trade it?

Learn all about Litecoin and the LTC price history, how it works, and how to trade LTC/USD via CFDs on Capital.com

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What is Litecoin?

Litecoin is a decentralised, open-source blockchain created in 2011 by American computer scientist and former Google engineer Charlie Lee. Designed as one of the first-ever ‘altcoins,’ Litecoin aimed to address some of Bitcoin's perceived limitations, such as slow transaction speeds, high fees, and increasing centralisation of mining power.

Built on the foundation of Bitcoin (BTC)’s codebase, Litecoin features key innovations designed for practical, everyday use. Litecoin’s faster block generation time provides faster transactions, making it relatively more suitable for smaller and more frequent payments. Its distinct consensus mechanism reduces the reliance on specialised mining hardware to ensure a decentralised mining ecosystem.

Its cryptocurrency – LTC – is considered the ‘silver to BTC’s gold,’ and remains prominent today. As of December 2024, LTC consistently ranks among the top cryptos by market capitalisation.

Litecoin vs Bitcoin: What are the differences?

LTC was created as an alternative to Bitcoin (BTC), when the cryptocurrency market was just a fraction of the size it is today. Here’s how they compare:

*depending on factors like network congestion

Discover more about Bitcoin (BTC) with its price history, how it works and more –  read our comprehensive trader’s guide to Bitcoin (BTC).
Alternatively, compare their performance with our live LTC/BTC price chart.

How does Litecoin work?

Litecoin is a blockchain, a public ledger where all transactions are recorded transparently and immutably. Each transaction is validated by participants in the network, ensuring that no single entity can manipulate the system. This decentralisation helps censorship and fraud while enabling trustless interactions between users on Litecoin.

Litecoin operates without a central authority, relying instead on a global network of miners and nodes to maintain its integrity. This decentralised infrastructure ensures that the blockchain is secure and resistant to tampering, providing users with confidence in its reliability.

Its consensus mechanism is designed to be less resource-intensive than Bitcoin’s and requires less specialised hardware for mining. The network processes a new block every 2.5 minutes, significantly faster than Bitcoin and many other blockchains. Litecoin’s rapid block generation time enables fast transaction speeds transactions quickly, with the aim of being suitable for smaller, everyday payments. 

The total supply of LTC is capped at 84 million coins, with new coins issued to miners as block rewards. To control inflation, these rewards are halved approximately every four years in an event called a halving. This gradual reduction in supply growth mirrors natural resource scarcity, helping maintain Litecoin’s value proposition over time.

What’s the LTC price history?

The LTC price history saw the altcoin trading at relatively low prices in its early days, with a notable surge in late 2013 during a broader cryptocurrency bull run. This propelled LTC to its first significant peak of over $40. However, the crypto winter of 2014-2015 followed, which saw LTC reach its all-time low of $1.11 in January 2015, influenced by factors such as the Mt. Gox Bitcoin exchange collapse.

The implementation of SegWit (Segregated Witness) in May 2017 significantly improved Litecoin's transaction capacity and speed. This technological advancement, coupled with the broader cryptocurrency boom, saw LTC's price increase sharply to a high of over $370 by December 2017.

When the crypto winter of 2018 arrived – market prices fell throughout the year – while LTC remained resilient and remained as one of the top cryptocurrencies by market capitalisation. The LTC price experienced short-term increases in 2019 during the lead-up to its second halving event in August, which reduced block rewards from 25 LTC to 12.5 LTC.

The COVID-19 pandemic in 2020 initially caused a sharp decline in cryptocurrency markets, including LTC. However, as global economic uncertainty grew, interest in cryptocurrencies surged. LTC benefited from this trend, seeing steady price increases throughout late 2020 and early 2021.

10 May 2021 saw the LTC price reach its current all-time high of $412.96, influenced by overall market enthusiasm and increasing institutional adoption of cryptocurrencies. This peak was short-lived, as environmental concerns about Proof-of-Work cryptocurrencies and regulatory crackdowns in China led to a market-wide correction.

Past performance isn’t a reliable indicator of future results.

Anticipation for LTC's third halving event, which occurred in August 2023, created significant price volatility in 2023. However, the price corrected shortly after, as often observed with cryptocurrency halving events.

The US presidential election in November 2024 had a notable impact on LTC's price, as uncertainty surrounding crypto regulations contributed to increased market fluctuations

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Which factors might influence the LTC live price?

While its market movements often correlate with bitcoin (BTC) and broader market sentiment, the LTC price may be affected by a number of unique factors, from technological advancements to regulatory developments to media coverage and market sentiment.

• Halving events and supply dynamics – Litecoin undergoes halving events approximately every four years, reducing the block reward miners receive by half. The most recent halving in August 2023 decreased the reward from 12.5 LTC to 6.25 LTC per block. These events reduce the rate at which new LTC enters circulation, potentially leading to increased scarcity and upward price pressure. Historically, anticipation of halving events has led to price increases, while post-halving periods may experience corrections as market excitement stabilises.
• Technological advancements and network upgrades – Innovations like the implementation of the MimbleWimble Extension Blocks (MWEB) in mid-2022 can improve Litecoin's privacy and scalability features. Successful upgrades can boost trader confidence, attract new users, and positively influence the LTC price. Conversely, delays or issues with updates may lead to uncertainty and negatively impact the price.
• Adoption and real-world use cases – Increased acceptance of Litecoin for payments and transactions can boost demand for LTC. Partnerships with payment processors, integration into financial services, and adoption by merchants enhance its utility and value. However, slow adoption rates or competition from more widely accepted cryptocurrencies may negatively impact the price.
• Bitcoin and broader market trends – As one of the earliest altcoins, LTC often follows BTC's price movements. Significant gains or losses in BTC can lead to similar trends in LTC due to market sentiment and investor behaviour. Positive developments in the overall cryptocurrency market, such as increased institutional investment or mainstream adoption, can benefit LTC. Conversely, negative news or market downturns can have an adverse effect.
• Regulatory developments – Changes in cryptocurrency regulations can significantly impact LTC's price. Policies that restrict or ban crypto activities may reduce market accessibility and trader confidence, potentially leading to price declines. Conversely, regulatory clarity and acceptance can encourage wider adoption and positively influence the LTC price.
• Market sentiment and media coverage – Public perception and media narratives play a crucial role in LTC's price volatility. Positive news, endorsements from influential figures, or optimistic market analyses could attract new investors and push up the price. On the other hand, negative media coverage, security concerns, or legal issues might erode confidence and cause the price to fall.

What are the LTC trading hours?

LTC operates on a decentralised blockchain network that is active 24 hours a day, seven days a week. This means you can trade LTC at any time, including weekends and holidays.

• Cryptocurrency exchanges – many exchanges facilitate 24/7 trading, allowing for continuous market participation.

• Online trading platforms – some reliable and trusted brokerages provide LTC trading via CFDs.

If you choose to trade CFDs, you can follow the LTC performance live in US dollars with our comprehensive LTC/USD price chart.

Alternatively, you can check out our LTC/EUR and LTC/BTC price charts. 

Monitoring the cryptocurrency’s activity can help you to keep an eye out for any key fundamental or technical events that may affect short-term movements in its value.

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How to trade LTC

LTC is a cryptocurrency, meaning that it can be traded directly on a cryptocurrency exchange or through peer-to-peer transactions. Traders may also choose to trade LTC via a derivative, a financial product that takes (or ‘derives’) its value from the price of the underlying asset.

You could use a contract for difference, or CFD, to trade on the price of LTC pairs. A CFD is a contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

You can use CFDs to trade on whether you think an LTC pair will rise (called ‘going long’) or fall (‘going short’). CFDs give you access to leverage, allowing larger positions with a relatively small outlay. This amplifies your potential profits, but also your potential losses, making CFD trading risky. 

You can learn more about trading cryptocurrencies with Capital.com in our comprehensive guide to cryptocurrency trading. 

Aside from CFDs, you can also trade LTC pairs through instruments like futures, options, ETFs, and mutual funds. Each offers an alternative to the leveraged trading of CFDs, suiting different risk profiles and strategies.
 

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