Yesterday proved rather interesting for the digital currency markets, particularly as related to alt coins. While prices were mostly up on the day across the board, one particular dynamic stood out as noteworthy: a massive leap in LTC / USD was followed shortly thereafter by a similar climb in XBT / USD.
We’ve written previously about the interaction of bitcoin and litecoin, noting that their trading indicates a strong relationship between the two (see here and here for further detail), but for litecoin to so visibly and dramatically lead trading is relatively unprecedented and largely unexpected.
Bitcoin maintains a total cumulative market size some 15x larger than litecoin, with the latter often looked at as the first example of the ease of creating new digital currencies devoid of network-driven value. Yet, today’s trading showed that not only is the relationship between the two strong, but also that the perennial favorite may even be subject to a much smaller asset.
Despite having a lower overall USD-equivalent capitalization, trading volume in litecoin actually exceeded that of bitcoin on BTC-e, the leading exchange on which they’re both traded. In particular, LTC volume was consistently greater during the period of dramatic price volatility, further adding to the notion that litecoin activity actually drove bitcoin prices.