BTC pairs and the Altcoins market

in #vincentb6 years ago

altcoins ori.jpg

Today I was looking at Twitter and couldn't believe when I read what comes next:

"The only way to stop the entire market from being manipulated is to unhinge Alts from bitcoin. The pairings need to be in fiat. The whales can control bitcoin and thus control the entire ebb and flow of the market. When bitcoin drops in USD any alt paired to bitcoin will also drop on USD. Thus people freak out... since they don't understand the dynamics behind the pairing they dump their alts at a lower satoshi price. Which becomes a double negative for the alt"

First of all I must say that in no way I'm not trying to ridicule whomever wrote this text or anyone who might feel there is some truth in it. I just that I felt compelled to bring up why this is so wrong after checking out on the same platform how many people seem to agree with this.

I want to address a couple of missconceptions here that lead to a failed conclusion. "The whales can control bitcoin" is a very popular myth and there are two main reasons why people believe this even when it's not truth. By checking the blockchain history you can see how a few publick keys/addresses seem to handle the biggest amount of bitcoin in circulation. However, people seems to forget that most of these addresses belong to the biggest exchanges in volume, so actually these bitcoin don't belong to just a handful of people but to the millions of users of those exchanges. And of course, there are some "whales" in this world but we also have some very rich people in fiat that have much more money than the rest of us. But this"whales" are not moving their bitcoin around, if they had, they wouldn't be "whales" anymore. They "hodl".

Then we have the second missconception I was talking around. "Thus people freak out... since they don't understand the dynamics behind the pairing they dump their alts at a lower satoshi price". Well, of course there are people who do this, we can't deny that. But I don't think you can say that most of altcoins investors act this way. Once you use your BTC to buy some altcoin for the first time you must know why you do it. Is it to gain more BTC or are you interested in buying the altcoin because you think it will help you earn more fiat currency than simply holding your BTC?

If you belong to the first group then you obviously always look at the BTC price, which lives you out of that group of people. If you belong to the second group then, even when you probably look at the USD price, by now you must know the dynamics of this market and understand that if bitcoin's USD price falls, your alt's USD price most probably will fall too and all you have to do is wait for it to go up again. If you don't know that, then you're a victim of your own ignorance.

We must not adapt the market to your ignorance, we must try to educate you so you don't hurt your own pockets (and ours either).

Finally, I must address directly this text's conclusive point. "The pairings need to be in fiat". This misses the whole point of what cryptocurrencies were created for, and basically says "we can't let whales manipulate the market, we should just let the FED do it".

What do you think?

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Whales can speculate if they form some kind of alliance but the real reason why prices are moving up or down is the information investors receive.
for example:
I just read that China activated it great firewall and Chinese IP addresses will not longer be able to access cryptocurrency websites such as bittrex coinbase bitfinex etc.
This surely hit and other related news as well.
It is quite reasonable to suspect governments and financial institutions that they are also manipulating with prices by distributing powerful announcements to drive the prices down or up depending on the vector of the news.
What if BTC price will be pushed down to 5K or 3K and then JP Morgan will say that we have concluded that there are no reasons to ban BTC any more and we will invest 5 Billion in it.?

Is buffett also playing?
The fact that cryptos can not be erased can be argumented by many ways. Are the rich trying to save the world or are they trying to save their asses, that is the question.

I get the fact that most experienced crypto investors prefer the BTC price pairing, however for the newbies this is extremely confusing. I'm not new to capital markets but my brain is completely wired to think of price in terms of USD. It's what ever other asset I own is priced in and the fact my crypto portfolio has to play by its own rules makes it even that much more difficult to adopt. I see an edge for those who use BTC price pairing but I don't think USD price pairing should be excluded.

I agree to this, to make the transactions transparent for me I created a large excel template to calculate everything to $ and from there to € stupid but need it for tax anyway. It is even more complex if you trade some tokens against BTC, ETH and BNB when being on Binance. I do not say it would be better, at least direct pair to fiat would be easier.

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Go scam people somewhere else

Good to know

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I am BTC fan but everything need to have fiat pair. If you believe in a free market than you must have a choice which currencies you wanna use to buy things. Short term this is not good for BTC but BTC will always be there and buying alts with BTC should be only one of use cases.

''Everything need'', ''must have'', and ''should be'': those are not what defines a ''free market''. Not arbitrarily restricting free exchanges of red rocks for blue waterdrops is not the same as making this specific market an obligatorily available one.

Exactly opposite. Free market must and need to have freedom and if somebody wants to buy alts with fiat then this option is necessary...

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A topical post and one that underlines the chaotic nature of the market presently.

When people call for pairings to be made against fiat, I think they just want a pairing that is made against something that is not prone to such volatility.

They’re sick of their alt coin, that is a strong, stable 3rd gen product with a healthy future being dragged through the trash every time BTC gets dumped.

The time has come for a stablecoin to come to the fore, either DGD or DAI. Bitcoin has been used and abused, but until something else steps forward, we’re stuck with it and it’s volitility, and like a runaway dog dragging its toddler behind it is causing chaos, fear and uncertainty for the novice investors that have been pulled in with all of the hyperbole.

BTC needs to correct and settle down to its true value. ‘Traders’ need to understand the basics of trading, investors need to understand the long game and believe in their product and everyone just needs to calm down a little bit. It’s going to get worse before it gets better, but isn’t it this volitiily that has drawn us all in?

Exactly. I understand that people sometimes need a stable reference. But just as you said, if it wasn't for volatility most people wouldn't have bought BTC or any other crypto to start. IMO we should all relax a bit and enjoy the ride, with bumps and all

Do you know you can make over 12.8BTC mining with a good software, i have this programme and it's sold for over $4,750.00 but i will provide it for you to use for the first time for free. It works on blockchain users only. You can contact me directly via [email protected] for me info

Nice article. Concept of blockchain and cryptocurrencies is very complicated. Most of the people including myself got in to crypto space to get rich quickly but had no idea what bTC, blockchain is but I am learning.

Once you understand the possibilities, markets, whales, terms, philosophy and demand behind the tech, it will be more easy for you to understand. You can search up many articles in steemit, which are rich in context. Better than everywhere else on the internet.

I agree. I am still learning although in the beginning I was buying cryptos only because they were recommended by random people on Youtube which was just stupid. I think if you know what you are investing in then market crash doesn't affect you that much.

You formed a well mind already!

Well I am trying but still not there yet. Although I have learnt that these big investors, banks or so called whales do play with us by creating fear and making us sell when we hear negative news. Its easy to say that patience is the key but its not that easy to control your emotions when market is crashing.

It is easy! You will learn over time. Just keep in mind that this technology is here to stay, maybe for ever..

I also got into crypto as away of get rich quick. But now am learning what its alot about. A piece of advice,for those getting in as away of cashing in fast, you will be shocked.

Great post. Thanks for clarifying these important misconceptions.
Kindly let us know what do you think is happening that is causing the current crypto currency market crash.
What are the reasons, if it’s not the whales? Then what is it that’s causing the market to behave the way it is behaving right now?

I think the market crash is based on the chinnese new year. When there are holidays people are more likely to cash out inorder to spend on gifts and celebration. This is relavent because most crypto is held in asia and if they sell there is bound to an impact in the market.
Why I think this is the case is simply because if you log on to http://fiatleak.com its a website that tracks new money coming into crypto you'll find its mostly usd are coming in.
I think the crypto will stabalise after the holidays in Asia and we'll see more different currencies coming in the space.

I think so too. I ll have a look at that website too. thanks for clarifying things.

Ive seen this theory that the Chinese New Year is the reason for the lack of other fiat currencies entering the pool, could it also be that those are the Govts that have spoken out about legislation and banning? Then there still may not be the injection needed from the Asian countries post Chinese NY? Or what do you think?

Interesting ... I didn't know about fiatleak.com . I ll check it out.

I think more Alt-fiat pairings will only be a good thing.

Of course all crypto-coins are subject to the volatility of the market and wild fluctuations, but at present there is a clear trend that whenever BTC goes down, it drags the whole market with it.

This is even more important with the current BTC futures.

Increasing Fiat:Alt pairs also makes it easier for those attempting to buy alt-coins directly without transaction fees, and potentiallymaking it more user-friendly without having to use exchanges.

I mostly agree with you but i believe that the truth is somewhere in the middle.

Of course it's not possible to have every coin paired with fiat, exchanges can't handle it.
However, they should have more fiat pairs with top coins. Also, there should be more pairs with other major coins like LTC, XRP etc, just like there are many pairs with ETH.

Regarding manipulation, i believe that the market is heavily manipulated. We can just check the charts for BTC, LTC, XRP etc and see they're almost identical. Obvious bot trading.

Whales today are not just early adopters who HODL, there are lots of funds that have bought billions of crypto and now move prices as they will to maximize profit. We can't prove it, but the facts agree with this theory.

Crypto is a young small and unregulated market compared with FX etc, so its very easy for them to do what they want. We small fishes just have to play along.

That's exactly what I think. I'm not a bitcoin only guy. I just don't think USD pairs for every single coin/token is necessary. I think the best solution is to have pairings with the top 5 or 10 coins (by market cap, daily volume, trajectory, etc) like BTC, ETH, LTC, DASH, BCH and maybe couple more

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