This model gives a fair price of litecoin at .035 LTCBTC which is around $1250 at bitcoins current price.
The litecoin network price multiple model can be used to determine the fair price of the litecoin network compared to the bitcoin network.
This model uses the total unique addresses of both networks to determine the network usage ratio. The Litecoin network total number of unique addresses is 13% of the total bitcoin unique addresses.
This ratio is then divided by the current ratio of litecoin to bitcoin market cap ratio to determine the multiple from a fair value of 1.
To calculate the current market cap ratio use the LTCBTC ratio x 4.
As shown in the chart below litecoin price is 11x undervalued compared to bitcoin.
Chart 1: Litecoin undervalued multiple. Fair value is 1. Litecoin is currently undervalued by 11 compared to bitcoin.
To view the model in real time enter the following into TradingView:
GLASSNODE:LTC_ADDRESSES/GLASSNODE:BTC_ADDRESSES/(THEROCKTRADING:LTCBTC*4)
Chart 2: shows the network price multiple model price in USD for litecoin and actual price for litecoin in USD. Fair value is $1250 today.
There has been several times when the litecoin price was at the fair value model price. This occurred in 2013-2014, 2015 prior to the halving, 2017 just after Segwit upgrade, and in 2019 prior to the litecoin halving.
It is reasonable to assume that litecoin will reach the model price prior to the next halving in 2023.
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