Daily General Discussion - December 10, 2017

Theory regarding BTC and the ALT market...

So, when someone purchases an ALT this is the process they go through:

1) Buy BTC 2) Sell BTC for an ALT 3) Alt price is then marked to the value of the ALT in BTC terms it ultimately get the FIAT value.

But, surely in this process there is an imbalance. Let me explain, the gateway coin (BTC) receives the upward push in USD terms from the buyer, but never receives a downward push in USD terms when it's sold for an ALT. Because of this, Alt's may be artificially inflated in USD terms because the are marked to the price of the gateway asset. In many ways, they will continue to be so until USD is the base for the market.

So, using this theory, when BTC goes down alts may go up in BTC terms but never in USD terms because you require fresh dollar injections to support the base the whole market is priced on.

Now, let me explain how this links to futures. People have the facility to be long the market, but not short (in an effective manner). This is what futures allow for. Because of this the BTC price will collapse post futures launch, and although alts may rally in BTC terms they will never exceed their previous dollar highs.

In this sense, it makes sense to go into USD before the fork, then enter the market again for cheap alts (in USD terms).

So my logic is this - the base for the market will always receive a higher return (on net) than alt coins because it is the gateway for the whole market.

Please criticise this! (I also need karma, so please up vote).

Thanks.

/r/CryptoCurrency Thread