There's multiple reasons they have value. First off, they offer different block chains for additional security. Litecoin uses Scrypt as opposed to SHA-2 encrypt

There's multiple reasons they have value. First off, they offer different block chains for additional security. Litecoin uses Scrypt as opposed to SHA-2 encryption, so it is harder for an attacker to hack both at once. If Bitcoin is brought down by an attack, Litecoin has a large chance of surviving. Investors are not simply pumping and dumping. I agree some are, but there is likely true long term value in having multiple block chains. edit: revised statement about security