Crypto for Advisors: Litecoin Explained

Written By

Josh Olszewicz, Canary Capital

Published By

Sarah Morton, CoinDesk

October 16, 2025

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Litecoin: A Resilient Digital Asset for the Long Term

LTC is one of the oldest and most established cryptocurrencies still in active use. Created in October 2011 by former Google engineer Charlie Lee, Litecoin was launched as a source-code fork of Bitcoin. While Bitcoin pioneered decentralized digital money, Litecoin sought to improve on its design by offering faster settlement times, lower transaction costs, and a larger supply. For this reason, LTC is often referred to as “the silver to bitcoin’s BTC gold."

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Key Technical Features

Litecoin shares Bitcoin’s proof-of-work (PoW) foundation but differs in several critical areas. Its block time is 2.5 minutes, compared to Bitcoin’s 10 minutes, allowing for quicker transaction confirmations. The maximum supply is 84 million coins, four times larger than Bitcoin’s 21 million, which makes individual units more accessible. Instead of Bitcoin’s SHA-256 mining algorithm, Litecoin employs Scrypt, which was designed to make mining more broadly accessible before the advent of application-specific integrated circuits (ASICs).

Since its inception, Litecoin has maintained uninterrupted network uptime, a rarity in the blockchain sector. This reliability, paired with low transaction fees that average under 10 cents, has positioned litecoin as a practical medium of exchange rather than primarily a store of value.

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Innovation and Adoption

Litecoin has also been an early testing ground for key blockchain innovations. In 2017, it became the first major network to activate Segregated Witness (SegWit), a scaling upgrade that optimizes block space and resolves transaction malleability. Shortly afterward, Litecoin helped pioneer the Lightning Network (LN), a second-layer protocol enabling instant, near-zero-cost payments. The first cross-chain Lightning transaction, routing LTC to BTC, took place shortly after SegWit activation.

Security has also been reinforced through a merged-mining arrangement with DOGE since 2014. By sharing hash power between the two Scrypt-based networks, both ecosystems benefit from stronger protection against potential 51% attacks.

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Supply Dynamics and Network Health

Litecoin’s issuance schedule mirrors Bitcoin’s, with rewards halving every four years. Over 90% of the total 84 million LTC supply has already been mined, and annual inflation stands under 2%. The next halving, expected in July 2027, will reduce inflation below 1%, comparable to many traditional safe-haven assets.

On-chain activity reflects Litecoin’s steady use. Transaction counts have grown during periods of Bitcoin congestion and spikes in Dogecoin demand. Active addresses have shown resilience over time, highlighting relative utility compared with peer networks.

Hash rate, the measure of computing power securing the blockchain, has increased in recent years, supported by improved Scrypt ASIC efficiency and the incentive of combined litecoin-dogecoin mining rewards. Mining power remains concentrated among a handful of pools, but overall network security has never been higher.

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Valuation Metrics

Two widely tracked crypto valuation tools, the network value to transactions (NVT) ratio and the market value to realized value (MVRV) ratio, provide context for Litecoin’s current standing. NVT, which measures market capitalization relative to on-chain activity, sits below bitcoin’s and dogecoin’s, suggesting litecoin may be more fairly valued relative to its utility. Meanwhile, MVRV, which compares market price to the average price at which coins last moved, remains below long-term bull market levels, signaling subdued speculative excess.

External sentiment indicators confirm this picture. Google Trends data for “Litecoin” has declined steadily since its 2021 peak, pointing to reduced retail enthusiasm. However, such conditions have historically aligned with undervalued entry points in previous market cycles.

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Takeaways for Financial Advisors

For advisors evaluating the digital asset landscape, Litecoin represents a case study in durability. It has operated continuously for more than a decade, survived multiple market downturns, and consistently delivered on its value proposition: fast, low-cost, reliable transactions. While it does not command Bitcoin’s brand dominance or Ethereum’s smart contract ecosystem, Litecoin fills a complementary role within the broader digital asset market.

In portfolio construction, Litecoin can be considered as:

• A diversification tool within a crypto allocation, offering exposure to a network distinct from Bitcoin but with a proven security model.
• A lower-beta play on transaction-focused cryptocurrencies, with relatively muted speculation compared to meme-driven assets like dogecoin.
• A long-term store of utility, benefiting from declining issuance and consistent adoption, even amid shifting market narratives.

For clients exploring digital assets, Litecoin stands as one of the most tested and resilient networks in the space. Its combination of security, innovation, and practical utility underscores why it continues to endure as a key component of the crypto ecosystem.