Litecoin vs. EUR – Cryptocurrencies

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Cryptocurrencies are a digital form of financial transaction and offer an alternative and decentralized form of making a monetary transaction. Nearly all the cryptocurrencies work on a blockchain technology that is decentralized, which means two individuals can complete a transaction without the involvement of a third party such as banks. There is a digital ledger that records all the information regarding the transactions.

Some of the renowned digital currencies include Bitcoin, Ethereum, Litecoin, and Ripple. Bitcoin was the pioneer and dominates the crypto market with the biggest market capitalization, followed by Ethereum. Bitcoin is based on a peer to peer network of blocks that contain all the information such as amount, date, time, and participants. The sum of the blocks are called ‘blockchain.’ The transactions are processed accurately by miners who develop blocks that are then added to the chain.

Bitcoin was launched in 2009 and became a benchmark in cryptocurrencies, and few of the popular digital currencies we see today are due to changes and enhancements in the Bitcoin blockchain code that resulted in Bitcoin Gold, Litecoin, and Dash. In the cryptocurrency market, if Bitcoin is considered as Gold, then Litecoin is termed as Silver.

Litecoin is another open-source, decentralized cryptocurrency that allows a person to send, receive, and store money through a digital wallet. Litecoin is regarded as the third most influential cryptocurrency after Bitcoin and Ethereum. Litecoin went live on October 13, 2011, and was developed on a code that was similar to that of Bitcoin. The difference between Litecoin and Bitcoin are

• The transaction speed of Litecoin is faster than Bitcoin as the time it takes for a block to process in Litecoin is 2.5 minutes while 10 minutes in Bitcoin.
• Litecoin uses a different Proof of Work algorithm called ‘Scrypt’ while Bitcoin uses SHA-256

In November 2013, Litecoin saw massive growth and popularity and attained $1 billion in market capitalization. In May 2017, Litecoin was the first cryptocurrency to adopt Segregated Witness, and later in 2017, Litecoin was also the first to make a digital transaction using Lightning Network. Litecoin miners are awarded 25 Litecoins per block.

What is the LTC/EUR currency pair?

The Litecoin (LTC) pairing with Euro (EUR) is given by ‘LTC/EUR’ where LTC is the base currency, while EUR is the quote or counter currency. The LTC/EUR pairing indicates a combination of LTC, which is a popularly traded cryptocurrency, and Euro, which is one the second most traded and official currency of the European Union (EU). Traders and investors living in Europe feel it’s easy to trade LTC with EUR than any other Forex currency as they know the trends and price movements of the Euro.

The LTC/EUR pair attracts traders due to its high level of volatility and liquidity. The traders can speculate the sudden price movements and have the possibility to potentially profit. In a day, the LTC/EUR pair moves 5%, and in a week, the LTC/ETC pair moves 10%.

The LTC/EUR specifies the relationship of Litecoin with the Euro. The LTC/EUR pair shows how many Euros are needed to buy one Litecoin. The current exchange rate is 1 LTC = €39.77.

History of LTC/EUR Pair

Litecoin was developed by Charlie Lee, who previously worked in Google and served as an Engineering Director in Coinbase. Lee wanted to form a new digital currency similar to Bitcoin but removed some of the flaws or shortcomings of Bitcoin. The main aim of Litecoin was to reduce the centralization of mining and allow a common computer user to mine coins as compared to ASIC (Application Specific Integrated Circuit) miners. The Litecoin speed is 50 transactions per second, while Bitcoin speed is 5 transactions per second.

Litecoin is based on the same Bitcoin protocol but differs on the hashing algorithm. The code used in Litecoin is known as ‘Scrypt,’ which is a sequential memory-hard function, which means it requires more memory as compared to a non-memory hard algorithm.

Litecoin was launched on October 13, 2011, and during the two years till October 2013, it was priced around £1.60 or $2 but surged to an all-time high value of £294 or $375 on December 19, 2017. Also, in 2017, Litecoin reached $1 billion in market capitalization and also ranked at the top five cryptocurrencies. The supply of Litecoin is capped at 84 million. The market capitalization of LTC/EUR is €2.6 billion, and the circulating supply is 65.50 million.

Euro is the standard currency of the European Union (EU) and adopted as the official currency of 19 countries from the 27 member states. Among all the global currencies, Euro is fairly new as it was introduced in 1999, but banknotes and coins were made public in 2002. In 20 years, the Euro has become the second most influential currency in the world after the US Dollar.

How to analyze the LTC/EUR Price Chart

If we analyze the price chart of the LTC/EUR pair, we see that the pair traded in the range of €50.00 to €80.00 from the last week of January 2020 to the second week of March 2020. The value of LTC/EUR fell to the lowest value of €28.52 on March 16, 2020. The LTC/EUR tried to rise from the sudden dip, and the value started to rise steadily from May 2020. In recent months the value of LTC/EUR traded from €40.00 to €60.00 from the last week of July 2020 to the third week of September 2020. The highest value of LTC/EUR was €56.59 on August 17, 2020.

Currently, LTC/EUR pair trades on €39.77. The Bid price is 39.41, while the Ask price is 40.04.

If you believe that the price of LTC will increase against the EUR, then you will go long or Buy, and similarly, if you think the price of LTC will decrease against the EUR, then you will go short or Sell.

What causes price change in the LTC/EUR pair?

Like all cryptocurrencies, the value of Litecoin is not under an obligation of any specific rules of government, banks, or any other financial institutions. Litecoin is considered a younger brother of Bitcoin, so the factors that affect the value of Bitcoin also impact the value of Litecoin. The factors that do influence the price of Litecoin are

• The price movements of Bitcoin and other popular digital currencies
• The changing rules regarding the acceptance and legitimacy of cryptocurrencies
• The future developments and improvements in blockchain technology
• Number of miners and growing mining cost
• Negative news and announcements concerning Litecoin or digital currencies in general

The value of the Euro is impacted by the monetary policies and news releases by the European Central Bank (ECB). The factors that directly affect the price of Euro are interest rates, inflation, employment rates, debt and budget deficits of certain Eurozone countries, and political events.

The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.