Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Bitcoin Forum => Topic started by: emma.lee1890 on October 16, 2018, 08:15:37 PM
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If you have an idea how Forex exchange works then you will have an easy time understanding things. Bitcoin is like the US dollar in forex exchange. Bitcoin is the central currency and has served as a medium of exchange between cryptocurrencies. This implies that in order for us to compute the value of an altcoin we must consider this formula:
1. The value of bitcoin in dollar
2. The price of an altcoin in bitcoin form
3. Multiply the value of bitcoin (1) to the corresponding bitcoin equivalent or value of the altcoin (2) then you have the real value of an altcoin.
This implies that the value of an altcoin is dependent on the value of bitcoin in the market.
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it has already been proved that when Bitcoin grows then the whole market grows too, therefore the influence is very large
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I think, Bitcoin affect to other cryptos because Bitcoin is seem like main coin in crypto world, why I can say like that?
Because I see most exchange in the world there is listed Bitcoin and most of coin there we can change with Bitcoin, this like between tokens and Ethereum.
And If Bitcoin price down so that is will be affect to other cryptos, because the main coin is down.
I only know about that and I hope I can get more answer about this thread to make new knowledge for me and this forum's members.
Thanks
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@triplevodka, I think so. Bitcoin is the first currency and Altcoin is a follower. So Bitcoin has a pretty strong impact on the value of each altcoin. If the price of Bitcoin rises, the altcoin will be stable. And if Bitcoin goes down, the altcoin will go down. Whereas if Bitcoin soars, the altcoin will follow the rise.
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If you have an idea how Forex exchange works then you will have an easy time understanding things. Bitcoin is like the US dollar in forex exchange. Bitcoin is the central currency and has served as a medium of exchange between cryptocurrencies.
Yes, this is a good analogy. A strong USD causes a decline in other currencies.
This implies that in order for us to compute the value of an altcoin we must consider this formula:
1. The value of bitcoin in dollar
2. The price of an altcoin in bitcoin form
3. Multiply the value of bitcoin (1) to the corresponding bitcoin equivalent or value of the altcoin (2) then you have the real value of an altcoin. This implies that the value of an altcoin is dependent on the value of bitcoin in the market.
I get the formula No. 1 multiply to No. 2 is the equivalent of an altcoin in USD but I don't get the implication that altcoin is dependent on bitcoin base on that formula.
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Exactly. The effect of the price occurs through the binding of pairs, so when Bitcoin falls, the rest of the coins just follow it and vice versa, respectively!
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If this were so, then the price of altcoins would depend not only on the price of Bitcoin, but also on other coins that are now used as a pair on exchanges and exchangers - ethereum, litecoin and others. However, this does not occur with examples of other coins.
The price of altcoins really depends on the price of bitcoin, however this is due to the high level of capitalization of bitcoin, as a result of which bitcoin can have price dominance over other types of cryptocurrency.
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BTC has great impact on altcoins prices because it is still the most recognized and believed cryptocurrency. So when BTC price raises people sell their altcoins and buy btc.
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There has long been speculation that, Bitcoin and Altcoins have an inverse relationship: When Bitcoin rises, other coins fall because people are selling their alt coins to go into Bitcoin. When Bitcoin falls, other coins fall because people are selling everything. When Bitcoin rises, and then goes sideways, people diversify into alts and Ethereum’s price goes up.
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If you have an idea how Forex exchange works then you will have an easy time understanding things. Bitcoin is like the US dollar in forex exchange. Bitcoin is the central currency and has served as a medium of exchange between cryptocurrencies. This implies that in order for us to compute the value of an altcoin we must consider this formula:
1. The value of bitcoin in dollar
2. The price of an altcoin in bitcoin form
3. Multiply the value of bitcoin (1) to the corresponding bitcoin equivalent or value of the altcoin (2) then you have the real value of an altcoin.
This implies that the value of an altcoin is dependent on the value of bitcoin in the market.
Yes I think Bitcoin and Altcoins have an inverse relationship. Bitcoin price will affect the value of other coin. Because bitcoin is the first of crypto currency.
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Bitcoin have big affect many crypto based on my own experiences. Some of my holdings are going down when bitcoin price goind down too and when bitcoin pumping up some of my holdings are pumping up too. So that based on this I think bitcoin have very big affect in other crypto especially to the price.
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Remember that Bitcoin users in Crypto are almost or even more than 50% of all users in Crypto. So that they automatically proxit other Bitcoin than other coins even though they have coins other than Bitcoin. From there, it has had an effect on the rise and fall of Bitcoin and other coins. Since the beginning, Bitcoin has influenced other coin markets in Cryptocurrency.
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The Bitcoin is the anchor of the crypto market when Bitcoins price starts to fall, traders begin to sell all other coins and retreat back to fiat or stable coins.
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The main reason of other Crypto getting Affected by Bitcoin price is due to that everyone is holding altcoins to increase their Bitcoin investment. As everyone knows that We all trade altcoin and earn profit in Bitcoins so our Bitcoins volume is increasing and when Bitcoin price is increasing everyone start selling their altcoin and convert it to bitcoin so that they can sell in bitcoin high price.
This is the reason why crypto is getting affected by Bitcoin and even it is mostly valued by Bitcoin pair only.