Earlier this week, the popular crypto figure, Mike Novogratz has said that he couldn’t understand the price rally that Litecoin experienced recently as he believes that the digital asset is massively overrated.
The former partner at Goldman Sachs and the CEO and founder of the Galaxy Digital merchant bank have spoken out against the popular digital currency, Litecoin. Novogratz’ comments come on the day that Litecoin reached its highest price since June last year.
Speaking on Twitter, he said:
Gold has an $8.5 trillion dollar market cap. Silver is $15bn That is .17%. $BTC has a $90bn mkt cap. $ltc is $5.7bn which is 6.4% of $BTC. Silver is at least useful for industrial production. $ltc is a glorified test net for $btc. I don't get this rally. Sell $ltc buy $btc.— Michael Novogratz (@novogratz) 3 April 2019
You have already heard but the creator of Charlie Lee has said several times in the past that if Bitcoin is like digital gold, then Litecoin should be seen as digital silver.
Lee’s philosophy on the digital asset makes sense since the two cryptocurrencies share a similar goal. The only difference is that Bitcoin is a lot more expensive to mine, not to mention harder.
CryptoGlobe has analysed what Novogratz is trying to say in the above tweet by saying:
“Since silver's market cap is 0.17% of gold's market cap, it does not make much sense that Litecoin's market cap ($5.5 billion at the time) is 6.4% of Bitcoin's market cap ($90 billion at the time). Novogratz feels that since Litecoin is just a "glorified test net" for Bitcoin, such a high valuation is not deserved, and that's why he is confounded by Litecoin's strong price rally (over the past several weeks), which started on February 8. That's why he is recommending selling Litecoin and buying Bitcoin.”
By using the term ‘glorified test net’, Novogratz seems to be suggesting that he has been inspired by the managing partner at the crypto hedge fund, MultiCoin Capital Management, Tushar Jain.
In September last year, Jain published a blog post titled ‘Debunking Market Narratives: Litecoin ($LTC) Edition’ that claimed that the most popular narratives used for defending Litecoin don’t all seem inaccurate and called Litecoin ‘significantly overvalued’.