Litecoin vs. Ethereum
Ethereum vs. Litecoin: Which Should You Buy?
In the last few years, cryptocurrency investment has emerged as one of the most lucrative investment options. With over 25,000 cryptocurrencies on the market, selecting the right cryptocurrency to invest in can be a daunting task. Among the top-ranked cryptocurrencies in the market are Ethereum and Litecoin, both of which have high market capitalization and have gained rising adoption by traders, investors, and institutions. In this article, we will examine the features, price history, and performance of Litecoin and Ethereum to determine which cryptocurrency is the better investment option.
Ethereum vs. Litecoin: Quick Comparison Table.
Ethereum and Litecoin are cryptocurrencies with distinct features, utilities, and operational techniques.
| Ethereum | Litecoin | |
| Year of Creation | 2015 | 2011 |
| Market Cap | Over $450 billion | Over $8 billion |
| Consensus Mechanism | It originally utilized Proof-of-Work, but transitioned to Proof-of-stake during the Ethereum 2.0 upgrade in 2022 | It utilises the Proof-of-Work consensus mechanism |
| Transaction speed | Typically takes 13-15 seconds but may extend beyond 1 minute during periods of congestion. | It takes 2.5 minutes to create a new block and can process up to 56 transactions per second.
|
| Transaction fees | On average $0.7- $1.5, but may increase during periods of network congestion | An average of $0.03- $0.04 |
| Supply limit | Ethereum has no fixed supply, but it can become deflationary | 84 million coins |
| Utility | Smart Contract functionality | Payment Option |
| Smart Contract Compatibility | Ethereum was specifically designed to support the deployment of smart contracts. | Litecoin lacks in-built smart contract functionality and is not compatible with smart contracts. |
| Community | Ethereum has a diverse community of investors, developers, traders, and enthusiasts. | Litecoin has a passionate community of traders and investors. |
| Security | Validators secure the Ethereum blockchain by staking ETH | Miners secure Litecoin through computing resources and power. |
Technology
Ethereum
Ethereum was officially launched in 2015 by Vitalik Buterin. Vitalik viewed blockchain technology less as a digital payment system and more as a tool for distributed consensus where complex applications can be built upon using pieces of code known as ‘smart contracts.’
In the Ethereum Whitepaper, titled ‘A Next Generation Smart Contract and Decentralized Application Platform,’ Vitalik stated that Ethereum was created as an open-source platform to build decentralized applications using smart contract codes on the Ethereum Virtual Machine (EVM). Ethereum has since become a home to developers in DeFi, NFTs, and Layer 2 scaling solutions, as well as blockchains.
Ethereum was initially launched to utilize the proof-of-work consensus system, where miners validate the transactions, just like with Bitcoin. However, it transitioned to Proof-of-Stake during the Ethereum Merge in 2022—the transition aimed at improving the security, scalability, and energy efficiency of Ethereum.
The process of the Proof-of-Stake transition commenced in 2020 when the Beacon chain was created as an independent chain to test the Proof-of-Stake system. In 2022, Ethereum's original proof-of-work system was merged with the Beacon chain to become a complete proof-of-stake system.
Ethereum's proof-of-stake mechanism requires a minimum deposit of 32 ETH from validators for staking. Unlike in the proof-of-work system, validators do not compete; they are chosen randomly to broadcast the new block to the rest of the validators.
Ether (ETH) serves as the native token used to facilitate transactions and interactions within the Ethereum ecosystem.
Litecoin
Litecoin was created in 2011 by Charlie Lee, who derived it from a copy of Bitcoin's source code. It was developed to solve one of Bitcoin's significant challenges as a digital payment system: scalability.
Litecoin retained some of Bitcoin's core features, such as POW and the halving system, but employed a less resource-intensive hashing algorithm, Scrypt, instead of Bitcoin's SHA-256.
The primary utility of Litecoin is to facilitate instant payments. Its transaction speed and low transaction fees have increased its popularity amongst merchants and payment platforms as a reliable payment option.
In 2017, Litecoin activated SegWit on its network, which records signature and transaction data separately, thereby securing the network and increasing its scalability. Litecoin also introduced MimbleWimble (MWEB) in 2022, which enabled the encryption of transaction amounts and the elimination of traceable transactional history.
Litecoin's hashrate currently stands above 2 Ph/s; though significantly lower than Bitcoin's hash rate, it is an indication of strong miner participation, confidence, and security of the Litecoin network.
Price History and Performance
Ethereum
At the official launch of Ethereum in 2015, Ether (ETH) traded for $0.70. In less than a year, the value of $ETH rose to $10 and almost doubled before the DAO attack occurred, which caused a price drop from $20 to below $10.
$ETH picked up in the first quarter of 2017, rising to a price of $50. However, $ETH's first major breakout and milestone was crossing $1,000 in 2018. This was short-lived as the market entered into a bear phase, and $ETH dropped by more than 90%, trading at $80 in December 2018.
$ETH began a steady price recovery and maintained stability until 2021, when the market experienced a bull run, and the price of $ETH spiked to $4,000, reaching its all-time high of over $4,800 in November 2021.
Another bear season approached, leading the market to decline in the second quarter of 2022, which resulted in a drop in the price of $ETH to $1,000. The price dropped below $1000 on some occasions but frequently found support and resistance between $ 1,000 and $ 1,500.
Between 2023 and 2024, $ETH experienced a slow but gradual price recovery. News of institutional adoptions, such as the approval of Ethereum ETFs, also boosted the price of $ETH, reaching $3000 within the year.
The present year has followed a similar terrain for $ETH. The price of $ETH remains stable with no significant price decline.
Litecoin
Litecoin officially launched at $0.30 in 2011 and traded at single-digit prices until November 2013, when it hit double digits and a yearly high of $44.
The price surge was temporary, as LTC dropped significantly at the beginning of 2014, steadily declining to a single-digit value until the second quarter of 2017, when it crossed the $10 mark once more.
LTC continued to trade in double digits until 2018, when it first hit the triple-digit mark in 2021 and an all-time high of $410 in May 2021.
In 2022, LTC dropped and was valued below $100 until December 2024. Between December 2024 and the present, the price of LTC has remained relatively stable between $85 and $120, with occasional price dips.
Which Should You Buy: Key Considerations
Price
Ether (ETH) is currently trading at $3,363, while Litecoin currently trades at $112.
Although ETH has shown remarkable growth in recent years, rising over 1000% within a few years of its launch, the current price of LTC offers a more affordable entry point for beginners and first-time traders with limited capital.
ETH is priced higher and is a better option for traders and investors with higher capital resources.
Utility
Ethereum was developed primarily as a platform for decentralized applications.
The Ethereum ecosystem supports a wide range of applications spanning across gaming, decentralized finance, layer 2 architectures, and blockchain infrastructures, among others.
The primary utility of Litecoin is as a payment option. Its quick transaction speed and lower transaction fees make it suitable for everyday and microtransaction payments.
Therefore, Ethereum may be better suited for traders and investors who are enthusiastic about decentralized innovations within the ecosystem. Meanwhile, LTC may be a better option for investors interested in instant payments with digital currencies.
Security
Ethereum is secured by validators who stake ETH to protect the network from malicious actors and attacks.
Validators can have their staked ETH confiscated if any malicious intent to attack the network is identified, serving as a penalty and deterrence. While a 51% attack on Ethereum is possible, it would be extremely costly to execute, as it requires more than 50% of the total staked ETH.
Nevertheless, Ethereum is prone to centralization. The majority of staked ETH is controlled by the top 4 validators: Lido, Binance, Kraken, and Coinbase. This may result in centralized decision-making and government censorship, posing a long-term threat to its security.
Litecoin uses the proof-of-work system, in which miners validate transactions and secure the blockchain using computing resources and power. Litecoin is considered one of the most secure blockchains, as it has never experienced downtime since its creation in 2011.
Institutional adoption
Ethereum's utility enables an open-source platform where any application can be built, which has granted it popularity amongst different sectors and institutions.
Ethereum also forms a significant part of the investment holdings of top companies, such as GameSquare Inc., Coinbase Global Inc., and Exodus. Last year, the SEC approved Ethereum ETFs, driving the growth and institutional adoption of Ethereum.
Litecoin has gained popularity amongst merchants and payment platforms as a payment option. Litecoin ETFs are currently awaiting approval from the SEC, which is expected to boost further institutional adoption of Litecoin.
Ethereum has more institutional adoption compared to Litecoin, whose adoption is restricted due to its limited use case.
Competition
There are other alternative currencies, such as Solana, Near, and Cosmos, which enable smart contract functionality.
However, they do not pose competition to Ethereum, which remains the second-largest cryptocurrency, after Bitcoin. Ethereum's first-mover advantage cements its position as the leading decentralized application platform, despite advancements in other blockchains.
On the other hand, Litecoin does not have a dominant position as a digital payment currency. Besides lagging behind Bitcoin in terms of adoption as a digital payment, it also competes with other digital currencies. One of them is Ripple, a popular payment option that boasts fast and affordable transactions. Ripple is currently the third-largest cryptocurrency on the market and may pose a long-term challenge to Litecoin.
Investment Potential in 2025
Ethereum
Ethereum has retained its position as the second-largest market capitalization and leading ecosystem for developers in 2025, attracting investors, including institutional investors.
Ethereum ETFs were approved in the last year and have received significant inflows, even surpassing Bitcoin's daily ETF inflows in recent times. This signals the growing interest and adoption of Ethereum. Ethereum currently trades at $3,739, which is only $1,000 less than its all-time high.
Litecoin
Most experts consider Litecoin undervalued and have taken a neutral to bullish stance on LTC's price prediction for 2025. The approval of a Litecoin ETF can also boost institutional adoption of Litecoin, increasing the value of LTC.
Can you own both?
One of the most advised trading strategies is diversification of holdings. All cryptocurrencies are volatile and vulnerable to market trends and conditions.
Other factors that affect the market price of cryptocurrencies include technological advancements and regulatory positions. Therefore, diversification of the portfolio is one of the best risk mitigation strategies.
You can own both cryptocurrencies by purchasing them on a crypto exchange like Switchere. You can also withdraw your cryptocurrency into your wallet for security purposes or trading. An easy way to own and manage both assets is to use a multi-chain wallet, such as Trust Wallet, which is compatible with Ethereum and Litecoin.
How to Buy ETH or LTC Safely.
One of the most crucial considerations when purchasing cryptocurrencies is the security of the cryptocurrency exchange.
Switchere is a secure and reliable crypto exchange that allows users to buy cryptocurrencies like ETH and LTC in five quick steps:
- Register an account on the Switchere website or download the Switchere mobile app.
- Input details of your credit/debit card and verify your account
- Select LTC/ETH
- Confirm the payment and receive tokens in your exchange account
- Enter a compatible wallet address to withdraw tokens.
Conclusion
Ethereum and Litecoin are prominent cryptocurrencies in the market, catering to different needs and aspirations of investors.
Ethereum remains the leading platform for decentralized applications and has hosted some of the most successful decentralized applications we have today. Although Litecoin is not Ethereum's strongest opponent, it holds a unique position as a fast and efficient digital payment option.
Both currencies have positive price potential in 2025 and are generally considered safe and reliable investments. However, investors need to identify their unique needs and aspirations and invest in the cryptocurrency that is best tailored to them.
Please be advised, that this article or any information on this site is not an investment advice, you shall act at your own risk and, if necessary, receive a professional advice before making any investment decisions.
