Is Litecoin a good hedge against Bitcoin's volatility?
Is Litecoin a good hedge against Bitcoin's volatility?
Some people believe that Litecoin is a good hedge for Bitcoin. There are a few reasons for this:
1. Statistics shows they have a low correlation
During mid-July, there was a time when Bitcoin dropped to as low as $1900 when there was a risk of a potential chain split and this has also made most other altcoins drop in value. However, Litecoin was hardly affected.
2. If Bitcoin fails Litecoin can take over
The technology used in Litecoin is very similar to Bitcoin and this is one thing that is holding Litecoin back. However, if Bitcoin fails, there is a chance that Litecoin can take over.
3. Litecoin has technological and leadership advantages over Bitcoin
In a previous post, I talked about the advantages of Litecoin: https://steemit.com/bitcoin/@forumpromotion/will-litecoin-ever-overtake-bitcoin. If things does go wrong, these advantages may prove crucial. For example, with the recent Bitcoin chain split, Litecoin could be a pretty good backup as there is no politics in the Litecoin community.
It is always important not to put all your eggs in one basket. Do you think Litecoin is a good hedge against Bitcoin's volatility?
Disclaimer:
This is not trading advice and please do your own research before investing. We do not take any responsibility for any losses you make.
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I like your post a lot, i am personally of the opinion though that diversifying is key generally, LTC can still be volatile. I would recommend holding a few of the larger cap cryptos and maybe being overweight in the ones you like the most.
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