In simple terms, why are BTC and LTC prices so closely tied?

[DrBitcoin]

Can someone explain in plain simple English why Bitcoin and Litcoin prices so closely tied? Just curious. Thanks.

[Rampion]

Because LTC is a clone of BTC?

[Gabi]

Because they are mostly the same thing, also because they can very easily be exchanged.

[hilariousandco]

Can someone explain in plain simple English why Bitcoin and Litcoin prices so closely tied? Just curious. Thanks.

Because Litecoin is pegged to Bitcoin.

[bmanzzs]

because there aren't many exchanges that deal directly from fiat to LTC. there are many more exchanges that deal with fiat to BTC, so that's why you see generally see similar price fluctuations with the other alt coins as well.

[nobbynobbynoob]

Arbitrage.

I've been around these parts long enough to remember when the exchange rate was about 300 LTC for 1 BTC. But now, litecoin has grown up some and is no longer as puny or volatile a market as it once was.

[yatsey87]

because there aren't many exchanges that deal directly from fiat to LTC. there are many more exchanges that deal with fiat to BTC, so that's why you see generally see similar price fluctuations with the other alt coins as well.

You can usually only buy LTC for BTC and when Bitcoin's prices rise a lot of other currencies follow it a little, LTC being one of them.

[CryptoPanda]

most trade is BTC/LTC not USD/LTC , so that's why

[odolvlobo]

Can someone explain in plain simple English why Bitcoin and Litcoin prices so closely tied? Just curious. Thanks.

These:

most trade is BTC/LTC not USD/LTC , so that's why

Because they are mostly the same thing, also because they can very easily be exchanged.

Not these:

Arbitrage.

Because Litecoin is pegged to Bitcoin.

[Tirapon]

http://thegenesisblock.com/understanding-the-gold-silver-ratio-and-how-it-may-apply-to-bitcoin-and-litecoin/

[keithers]

Arbitrage.

I've been around these parts long enough to remember when the exchange rate was about 300 LTC for 1 BTC. But now, litecoin has grown up some and is no longer as puny or volatile a market as it once was.

Yes, this is correct.   I came in when the exchange rate had gone up to about 150 LTC to 1 BTC, and the ratio has gone up significantly from there  (even with the decline we have seen over the recent days).

[epicradness]

Very informative. I've always wondered this too.

[keithers]

As mentioned above, the price is so closely tied, because there are not very many major exchanges that support Litecoin, and to my knowledge there isn't anyone reputable that offers a service like Coinbase for LTC.   

BTC-E is the big player in regards to exchanges for LTC, and a large portion of the LTC transactions are purchases of LTC with BTC.

Once Litecoin has more mainstream adoption, and more major exchanges support it, we will finally see LTC separate itself a bit from having a mirror image of the BTC chart.

I have about 65% BTC and 35% LTC.   I truly think that in the future LTC may very well be the currency that gets used for day to day purchases, whereas BTC could eventually become a large store of value used only for major purchases...

[Cryptopher]

Most coins in general that are exclusively tied to BTC i.e. COIN/BTC are going to fluctuate along with BTC, unless they have their own news.

LTC is traded for USD in some places, but not many. It has kind of lost its way a bit in the past two months, It used to be 0.035 BTC per LTC, now it is sitting around the 0.025 mark (on BTC-E).

[keithers]

Most coins in general that are exclusively tied to BTC i.e. COIN/BTC are going to fluctuate along with BTC, unless they have their own news.

LTC is traded for USD in some places, but not many. It has kind of lost its way a bit in the past two months, It used to be 0.035 BTC per LTC, now it is sitting around the 0.025 mark (on BTC-E).

I think any LTC news has been buried by the overwhelmingly bad news (whether true or not) that has come out about BTC over the past week and a half...

[LiteCoinGuy]

because gold and silver are also closely tied.

[N[e]wBie]

as the market cap of litecoin becomes closer to btc it should make the price target of LTC reach closer to 1:1

[medUSA]

It always puzzles me how LTC is pegged to BTC??
What mechanism does it use?
Now I can only assume it is pegged purely on expectations.

I remember months ago, so many of people said LTC should be 0.25BTC (4:1)
because it's total supply is four times of BTC. I said WHAT?

I wonder where those people are now...

[roslinpl]

Can someone explain in plain simple English why Bitcoin and Litcoin prices so closely tied? Just curious. Thanks.

I guess it is not so simple - during hisory we could see a lot of day when price was not realy related.

[cdog]

as the market cap of litecoin becomes closer to btc it should make the price target of LTC reach closer to 4:1

FYP

I think 4:1-5:1 would be ideal, Im thinking $10k BTC means ~$2500 LTC