Per the long-standing relationship of gold and silver - in which silver has been considered “poor man’s gold”; Charlie Lee created Litecoin with a view of it being “crypto silver to Bitcoin’s crypto gold.”
Litecoin has been a wildly successful venture, in establishing a network effect second only to Bitcoin, and stability that ensures it will last indefinitely. Typically, Litecoin’s valuation has been around 1-2% of a Bitcoin – which coincidentally, is about what silver’s valuation is relative to gold.
Unfortunately, with Bitcoin’s network effect growing faster; with stronger security, and “cryptodividends” like BRhodium adding to its “yield”; it’s difficult to see how Litecoin’s valuation relative to Bitcoin can materially rise in the coming years. Similarly, silver has seen its valuation relative to gold decline for years – which is why, among other reasons, I sold my silver this summer. In fact, the major catalyzing event for selling the remainder of my silver – and Litecoin – was the activation of SegWit on Bitcoin – as afterwards, I saw no way either could compete with Bitcoin’s superior monetary properties.
This winter, I sold my gold, too, for the very same reason. However, given its stronger investment history, I expect gold to maintain monetary value indefinitely - despite its inevitable usurpation by Bitcoin. Conversely, I now view silver as a glorified base metal, that can only regain monetary value if a worst-case, apocalyptic inflation scenario arrives…at which point, it would still underperform both Bitcoin and gold.
When BRhodium is launched – likely, in the next few weeks - I believe it will take Litecoin’s place as the “crypto silver to Bitcoin’s crypto gold.” However, now that I have lost faith in silver’s monetary value, “crypto Rhodium to Bitcoin’s crypto gold” seems more appropriate…as not only is Rhodium the scarcest of the Precious Metals; but recently, the best price performer.
Thus, while Litecoin should continue to maintain a 100% directional correlation with Bitcoin - just as silver does with gold; I believe BRhodium, not Litecoin, is likely to be viewed, in time, as the number two “crypto monetary asset.” The process will take time to play out – for investors to learn of it, feel comfortable with the network’s security, and build trading liquidity…but in time, I view this outcome as very possible – which in turn, could give it a premium valuation relative to other crypto assets.