Litecoin In India: Worth Investing?

Litecoin is a type of cryptocurrency, similar to Bitcoin. Cryptocurrencies are digital assets that can be used to exchange value anywhere in the world, without a physical form. Bitcoin is the oldest, biggest, and most popular cryptocurrency in the world. It is also the first digital currency to leverage peer-to-peer technology to facilitate real-time payments. In India, there are several platforms that allow individuals to invest in Bitcoin, such as WazirX, ZebPay, Coindesk, and Coinbase. However, before investing in Bitcoin in India, individuals must get verified through a Know Your Customer (KYC) process and submit documents such as a PAN card, address proof, and bank account details. While the Supreme Court of India overturned the ban imposed by the Reserve Bank of India on Bitcoin in 2020, there are still no clear regulations or guidelines for investing in cryptocurrencies in the country. Therefore, individuals interested in investing in Litecoin in India should carefully research the legal and financial implications and consider the associated risks.

How to invest in Litecoin in India

Step 1: Get Verified

Before investing in Litecoin in India, it is necessary to get verified through a Know Your Customer (KYC) process. This involves submitting personal documents such as a PAN card, address proof, and bank account details. It is important to ensure that all these details belong to the individual seeking to invest. This verification process can be completed before or after opening a trading account with a cryptocurrency exchange.

Step 2: Choose a Cryptocurrency Exchange Platform

There is no standardized structure for trading cryptocurrencies in India. However, several crypto exchange platforms facilitate trading, including WazirX, CoinDCX, ZebPay, Coinbase, and Coindesk. It is recommended to explore the features and policies of each platform before selecting one that aligns with your investment goals.

Step 3: Create an Account

After selecting a crypto exchange platform, the next step is to create an account. This typically involves signing up with an email address and password. Some platforms may also offer additional security options, such as an Authenticator App or mobile SMS verification. It is essential to carefully review the platform's security measures to protect your personal information.

Step 4: Complete the KYC Process

Most cryptocurrency exchange platforms in India require users to complete the KYC process. This involves providing additional details such as your name, address, and date of birth, and a government-issued identity card, such as an Aadhar card, PAN card, or driving license. The KYC approval process can take around 48 to 72 hours, but you may be able to start investing while your documents are being processed.

Step 5: Deposit Funds and Purchase Litecoin

Once your account is set up and verified, you can deposit funds into your wallet via various payment methods, including UPI, RTGS, NEFT, debit or credit card, or peer-to-peer transfer. Then, navigate to the exchange dashboard and select Litecoin as the cryptocurrency you want to invest in. Specify the amount you want to invest, keeping in mind that you can invest in partial Litecoins. Complete the transaction by following the platform's instructions.

Important Considerations:

• Legal Status: While the Supreme Court of India overturned the Reserve Bank of India's ban on cryptocurrency transactions in 2020, there are still no specific rules, regulations, or guidelines in place for resolving issues related to cryptocurrencies in India. Therefore, it is essential to carefully consider the associated risks.
• Volatility: Cryptocurrencies, including Litecoin, are highly volatile due to their decentralized nature and market dynamics. The value of your investment can fluctuate significantly, and there is always a risk of losing capital.
• Security: Cryptocurrency exchanges and wallets have been targeted by hackers in the past. It is crucial to prioritize the security of your Litecoin wallet and personal information to minimize the risk of unauthorized access or theft.
• Tax Implications: Investing in cryptocurrencies has tax implications in India. Consult a tax professional to understand the tax treatment of capital gains, losses, and income derived from cryptocurrency investments.

The legal status of Litecoin in India

The legal status of cryptocurrencies in India has been uncertain. In 2018, the Reserve Bank of India (RBI) restricted commercial banks from facilitating Bitcoin transactions in the country. However, this order was overturned by the Supreme Court in 2020, allowing crypto exchanges to resume their operations. It is important to note that while holding or transacting in Bitcoins was never illegal in India, there are still no specific rules, regulations, or guidelines in place to resolve issues related to cryptocurrencies.

The lack of regulatory clarity has resulted in a cautious approach by investors towards cryptocurrencies like Litecoin. The absence of a clear legal framework means that there is a risk factor associated with investing in cryptocurrencies in India. Despite this, the country has witnessed a significant increase in crypto investments, with a 20,000% rise in the past year alone. This surge in interest can be attributed to factors such as low internet costs, rising real estate prices, and increased taxation on precious metals.

To invest in cryptocurrencies in India, individuals must complete the Know Your Customer (KYC) verification process. This typically involves submitting documents such as a PAN card, Aadhaar Card, valid address proof, and bank account details. It is important to note that while investing in cryptocurrencies is possible in India, there are associated risks due to the volatile nature of the market and the lack of regulatory oversight.

While the legal status of Litecoin specifically may not be explicitly defined, it likely falls under the broader category of cryptocurrencies. Therefore, the same laws and regulations that apply to Bitcoin and other cryptocurrencies would also apply to Litecoin in India.

The minimum investment in Litecoin

As of August 2024, Litecoin is trading at $72, with a market cap of $5 billion. It is divisible up to eight decimal places, meaning that smaller portions can be purchased in any increment. There is no minimum investment amount for Litecoin, but it is always recommended that you only invest what you can afford to lose.

In India, investors can buy Bitcoin in Indian Rupees with a minimum capital of Rs.100. This limit could vary between different crypto exchanges.

Litecoin is a cryptocurrency designed for faster, more affordable transactions. It is considered the digital silver to Bitcoin's digital gold. Litecoin is faster and cheaper than Bitcoin, with transactions taking 2.5 minutes, compared to 10 minutes for Bitcoin.

Litecoin is a good investment option for those looking to get into the cryptocurrency market without spending a lot of money. It has a lot of potential for growth and is relatively affordable. Some experts believe that LTC could be worth $500 or more in the future, and even reach $10,000 by 2030-2035.

However, it is important to remember that the cryptocurrency market is extremely volatile, and there are risks associated with investing in Litecoin. It is crucial to do your own research and only invest what you can afford to lose.

Storing Litecoin

There are several ways to store Litecoin, and other cryptocurrencies, safely. Firstly, it is important to understand the difference between hot and cold wallets. A hot wallet is connected to the internet and allows owners easy access to their coins so that they can be accessed and spent quickly. However, this convenience does come with a trade-off; hot wallets are potentially vulnerable to bad actors, such as hackers. Hot wallets include online exchanges like Coinbase and PayPal, which will custody tokens for users.

Cold wallets, on the other hand, are not connected to the internet and are, therefore, a more secure option for storing Litecoin. These wallets store users' private keys offline, often on thumb drive-sized devices such as a Trezor or Ledger. Cold wallets require more upkeep, as they are usually stored in bank vaults or other secure locations, and can be more difficult to access. However, they provide greater protection against theft.

Some people opt to use a combination of hot and cold storage, keeping a small amount of Litecoin in a hot wallet for day-to-day use, and storing the majority of their holdings in a cold wallet for security. This is a good option for those who want to balance convenience and security.

When choosing a wallet, it is important to consider the level of security it offers, as well as its ease of use and accessibility. It is also worth noting that some exchanges, like Coinbase, offer their own wallets, but these may be considered less secure than offline cold wallets. Ultimately, the best storage option will depend on an individual's needs and preferences.

Litecoin wallets

Litecoin is a peer-to-peer internet currency that enables instant, near-zero-cost payments to anyone in the world. It is a fully decentralised, open-source, global payment network without any central authorities. Litecoin is based on blockchain technology, which secures the network and empowers individuals to control their own finances.

To store and use Litecoin, you need a Litecoin wallet. One such wallet is Litewallet, the official mobile wallet backed by the Litecoin Foundation. It offers simple and safe ways to use Litecoin and has been operational since 2011 without any downtime. Litewallet uses MWEB to keep your wallet balance secret, allowing you to send Litecoin without strangers seeing what's in your wallet. Additionally, wallet encryption allows you to secure your wallet, so you can view transactions and your account balance, but you must enter your password before spending Litecoins. This provides protection from wallet-stealing viruses and trojans and allows for a sanity check before sending payments.

Litewallet is available for both Android and iOS devices, and you can find the Litewallet code on GitHub.

Frequently asked questions