Over the past month and a half, we witnessed tremendous volatility in bitcoin, major cryptocurrency assets, and several leading altcoins. The one standout performer in this blockchain malaise was litecoin, the perennial "number two" cryptocurrency. What made litecoin so comparatively robust?
The answer is "deleverage" -- litecoin is simply independent (relative to many other blockchain assets) of bitcoin and its price trends. You saw this yourselves. While bitcoin for a few days dropped below the critical $2,000 threshold, litecoin did not challenge its lows. From my memory, it did not dip into $20 territory.
The evidence of litecoin deleverage is found in statistical correlations. This blockchain asset has a relatively weak correlation of 39% (FYI: I incorrectly stated in this video that it was 30% to 35%). Many other cryptocurrency coins have correlation strength of 52% or higher.
This weak correlation, though, indicates that the litecoin price action runs more independently of bitcoin, and therefore, is an excellent choice with which to hedge your bitcoin bets!
