Analysis of GOLD/ SILVER ratio compared to BTC/ LTC - What it means today?
Throughout the 20th century, the average ratio of silver to gold was 47x. That means 47 ounces of silver were needed to purchase one ounce of gold. Today, that ratio is closer to 78x. Many analysts believe that if we are to regard Bitcoin as digital gold, then Litecoin is digital silver. So the question is: Do the prices of Bitcoin and Litecoin reflect the gold to silver ratio?
At the time of this writing, Bitcoin is trading on GDAX at $15,855.
On the other hand, Litecoin is trading on GDAX at $280.
These prices represent a ratio of 56x. Pretty close to the historical average. If we are to base the price of Litecoin on the price of Bitcoin, applying the 50x ratio, the following chart shows what future LTC prices may be in the future.
| Litecoin | Bitcoin |
| $300 | $15,000 |
| $340 | $17,000 |
| $380 | $19,000 |
| $420 | $21,000 |
If we use a ratio of 78x, the prices would be as follows.
| Litecoin | Bitcoin |
| $192 | $15,000 |
| $218 | $17,000 |
| $244 | $19,000 |
| $269 | $21,000 |
It is important to point out that Litecoin was trading around $100 for a few months before its dramatic increase in December, right around the time Wall Street futures were announced. In the short-term, BTC and LTC prices do not move together. In fact, over the last year, BTC has tended to lead the rallies, with LTC trailing behind. This can usefull when the price of Bitcoin rises quickly. It may be a good indcator for when to purchase some LTC.