Let's Talk Market Cap

really good point. so now i'm thinking maybe the effect is a doubling of the volatility?

name 5 shitcoins that have a tether pair. i'll wait

>doubling of the volatility
Considering the observable high volatility in this market, I'd say that would make a lot of sense.

gate.io has a bunch of them

>This means the reverse of what you're talking about also happens, BTC/ETH lose market value > alts lose market value, even without a direct exchange between them.

this fucks up a lot of people

at least when alts bleed while btc is pumping you can get some value out of that
when alts bleed while btc dips you're losing on two fronts

M-mommy

I trade fiat for ETH, send ETH to Binance, sometimes trade ETH for BTC, then trade BTC/ETH for alts. I’m forced to touch BTC for liquidity only

God damnit I can't not look at this. Please sauce me, Google reverse doesn't bring up anything.

You're half right.
Total marketcap is doubled because it's both BTC mcap + All Alt mcaps = 2x Actual Total MCap.
However, altcoins marketcaps are overvalued because many altcoins have no fiat pairings, if BTC/ETH go up in USD value, the coin will appear to gain USD marketcap even if no trades are made.

What happens if she farts in those pants?

isn't that what we're all saying though? we also pointed out the opposite is true, that when btc/eth goes down, the alt goes down too with no trades made. so in essence mcap is like an estimation but the doubling effect is mostly doubling the volatility of the coin

>Since the fiat value of the alts are determined first by converting to btc/eth, and THEN to fiat, and given that the btc/eth mcap is artificially high/"doubled" since it was never decreased when traded for the alt... are we all in for a rude awakening in terms of our alts actual values?

No, but when you cash out of your alt, the total market cap takes a double whammy, all things being equal. alt ->btc, btc->fiat. Both steps reduce the total market cap, even though you are cashing out once.

Very good points. Total cash in crypto is

duh?

this is true for BTC and ETH. The whole reason ETH shot up so much last year is because of the literal 2000 worthless ERC20 tokens. Not only did people have to buy ETH for them, but the ETH then is artificially locked up in smart contracts. So artificial inflation multiplied by artificial scarcity.

BCH caused the alt-crash of july (not bitcoin core), because everyone sold their shitcoins to hold for the fork. BCH has kept pretty true to its value because no one buys BCH to buy shitcoins, they buy BCH to buy BCH. BTC is artificially inflated because that's the fork that shitcoin exchanges went with.

>mommy
sit down kid, ive got bad news for you
its a dude

this thread is all kinds of stupid. buying and selling coins does not alter the supply of coins and therefore we are strictly talking about price.
So you're saying that buying and immediately selling a coin, ie a wash trade can make the coin worth more, and that sounds wrong.

>So you're saying that buying and immediately selling a coin, ie a wash trade can make the coin worth more, and that sounds wrong.
buying and immediately selling is not the definition of wash trading you brainlet

>DEFINITION of 'Wash' A series of transactions that results in a zero net sum gain. This can be the result of a loss on one investment and a gain on another or it can be the result of buying and selling the stock of a single company.
you can tell that you're a little kidde from the little kidde insults you use

That's a fucking wash sale you absolute moron

Alts are killing each other

>A wash trade is a securities transaction which involves no change in the beneficial ownership of the security.

sec.gov/litigation/admin/3439133.txt

You are so fucking stupid and you don't even know it.

>samefagging on an id board

not quite - when you buy eth to buy an alt let's say, the price goes up. but when you trade it (sell) for an alt, the price doesn't go back down, bc the price is in terms of the fiat trading pair. does that make sense? so it SHOULD be a wash trade, but it's not reflected in the market caps on sites like CMC

I never pretended to be anyone else, thus it is not samefagging but just replying twice to tell you how stupid you are.

You got BTFO and now you have no argument

I was the OP of that thread. I explained it in a much retarded way than the OP of the archived thread I linked:
archived.moe/biz/thread/7228543

It's a must-read if this is the first time this has clicked for you. This topic wasn't super relevant a year or two ago, but now that we've been approaching the trillion-dollar mark and then "crash" down to $400bn, it's started to fool the general public into thinking we're in an """"actual"""" bubble this time.

The whole point of the archived thread linked, is that we haven't seen anything yet, in terms of real money coming into market. A few exchanges are pushing to become regulatory-compliant and institutionally attractive, and also provide ETFs, which will increase liquidity.
Add to that a new wave of global normie money, and we will see the beginning of the real bubble:
We'll probably see the spike to $20trillion by 2020 or sooner, and that may be with alt/fiat pairs, so this artificial fiat marketcap doubling nonsense will be a thing of the past.
tl;dr, if you think you're not going to make it because you though this was the actual bubble, you can think again, baby

So this means the true market cap of all altcoins should be in BTC or ETH and not USD, because those are the fiat gateway currencies. And if you like crypto at all you should prioritize getting BTC and ETH.

What does it mean for tether? Since someone usually buys BTC first with cash USD and then switches BTC/tether occasionally.

it creates an arbitrage. There's no 'doubling of the market cap'. 1 dollar going in is 1 dollar.

We being early doesn’t imply others will be late. We still need that killer dApp to prove public blockchain’s usefulness

so based on that, what does it mean for our current alt holdings true value - are they inflated, and once there are fiat pairs the true, lower values will slowly emerge (even if in the long run they'll eventually truly reach the current "artificial" marketcap levels again)?

not necessarily, because the alts are measured in the fiat offramps, so if you're thinking of short-term gains: fiat. Long-term: BTC/ETH.
The price and the marketcap are two different beasts, There are just compounding factors that lead to the alt and total marketcaps being very deceptive to the untrained eye.
I need to rephrase the statement. It's not so much that they're "inflated" (that is why some anons thought I was trying to FUD, or something)
It's that a disproportionately small amount of fiat can pump and dump the total marketcap, and that's why people thought it was a bubble, when it was just a normal rally and correction.
So its the perceived fiat inflow and outflow that's actually inflated compared to the reality.
Some anons mentioned that this is also true in the stock market, but it's even more-so in the crypto market.
It's an interesting point. Technically, BTC isn't getting sold when exchanged for tether. Tether is just getting exchanged for higher or lower BTC amounts, while the BTC marketcap stays the same (unless it is sold into fiat, obviously). Maybe smart anons can elaborate further.

they're not inflated they're just wildly volatile because of how "double cash out" works. i don't think alt/fiat pairs will solve much because all pairs will still be in equilibrium with each other similar to how there are hundreds of currency pairings but to convert from one to another it's still the same amount.

Yes OP, you are on to the right idea. What's really going on is that the fiat-BTC-alt channel is creating massive parametric leverage for alt trading. Basically, it's like we've all been margin trading alts for the past year, that is why their price is so volatile. That said, the fact that alts exist actually stabilizes the price of BTC somewhat. A BTC that exists as a buy order for VEN on binance is a BTC that can't exist as a sell order for USD on GDAX. So alts basically act as a huge buffer or heat-sink in times of market stress. People now tend to go shopping for alts when there is a dip as opposed to panic selling their BTC.

so, you'd say the fiat "prices" listed for coins are fairly accurate and not inflated or anything, regardless of this disproportionate marketcap, yeah?

Vechain has it.

>the fact that alts exist actually stabilizes the price of BTC somewhat
this is a good point. And it's also why it's retarded that people say that BTC is useless. It serves as a (somewhat) stable pool of liquidity for the alt-market, until alt/fiat pairs arrive.
Well, their spot-price in BTC/ETH is accurate, and the spot-price in BTC/ETH-to-fiat is accurate so yes. But just like mentioned, you're sort of leverage trading fiat when buying an alt, hence the higher risk/reward.
But the problem is the parallel effect: the alt and total marketcaps inflate and deflate wildly as a result, which would scare normie investors. I think smart institutional money knows this, and they're probably waiting on the type of exchanges I mentioned above.

care to explain your comparison to margin/leverage trading? my understanding of that stuff is pretty limited, and i thought that those terms mostly just meant that you take out loans to trade, so i'm not following that train of thought exactly

did some quick research myself and came across this: "Essentially, leverage allows you to pay less than full price for a trade, giving you the ability to enter larger positions than would be possible with your account funds alone. Leverage is expressed as a ratio. A 2:1 leverage, for example, means that you would be able to hold a position that is twice the value of your trading account. If you had $25,000 in your trading account with 2:1 leverage, you would be able to purchase $50,000 worth of stock."

is this what you're saying, that we're basically doubling our buying power bc of this effect?

it's just an analogy. You're absolutely not literally margin trading. You're just taking a higher risk/reward with your fiat, when buying alts with BTC/ETH, because your alt can rise/fall in BTC/ETH and your BTC/ETH can rise/fall in fiat.
So there's a slight analogy to leverage trading, only slight. Of course, your alt can fall 95%, and you lose your BTC/ETH and fiat!

Actually in this case, it is bitcoin which had the artificial increase in market cap.

The altcoin is the thing you wanted to buy, it is natural that it’s market cap went up.

Bitcoins market cap went up even though you didn’t want to buy it.

oh no i knew it was just an analogy, just wasn't sure exactly what the analogy was bc i don't have a great grasp of what margin trading is. what you said is a good way to put what's happening though. 2 price factors as opposed to one so a wider range of volatility

but here's the thing to remember, that's only because BTC/ETH is a fiat offramp, not because BTC/ETH will forevermore have inherently more value than other projects.
It is quite possible for alts to decouple or flip BTC one day, but we might see more alt/fiat pairs before that happens.

right, so until there are fiat offramps with enough volume/liquidity for an alt, this "2-factor" pricing effect will be happening, if I understand correctly

>"2-factor" pricing effect
Well, not necessarily a pricing effect. Just the inflated/deflated alt marketcap effect. The actual market price of alts make sense and is somewhat efficient, because people will consolidate to BTC after an alt bullrun etc.
It's the deceptive marketcap business that will carry on happening until enough alts get their fiat pairings.Think of it like this: imagine you had to buy gold with fiat, but you can only buy all other asset classes with gold. Think how ridiculous that is. The market caps of all asset classes will equal gold's fiat marketcap times the asset price in gold.

is this thread just a larp? how can you all be this dumb.

The previous threads had anons thought we were retarded.
It's really simple:
>BTC has never once in it's life actually been subjected to an organic level of price discovery, it's always been heavily manipulated during a time when the majority of the value of BTC was from mined coins that had never once touched fiat
>, 70%-80% of the alt market DOES NOT represent an actual influx of fiat into the market, but a mere artificial doubling of the fiat price of the fiat onramps used to purchase those coins. Meaning, when you buy BTC to buy an alt, fiat value goes into the market raising the "market cap" of BTC, but when you purchase your alt with BTC, the marketcap of BTC doesn't go down to represent a transference of fiat value to that alt, it merely pumps the "market cap" of that alt, artificially doubling the "market cap" of the entire crypto market.

When you add those two factors together, the total market cap is absolutely a completely inaccurate indicator of how much fiat is coming into the market. There's nothing inherently wrong with the price of alts, though, except for maybe an issue of liquidity because they're forced to be exchanged only with the fiat offramp bottlenecks

The point is that it's ridiculous to think we're in a bubble by looking at the face-value of the total market cap.

Here's a shitcoin buffet for you: coinmarketcap.com/currencies/tether/#markets

why crypto currencies are a scam alltogether:

calls itself currency, has no fixed value, backed by nothing but manipulation and reciprocation of such

anyway here's my fixed scamcoin with fixed total coins 1 gorillion ... have at it frieends

also my totally not useless partnerships

Why do people keep saying "satoshis wallet"?
He has several wallets and probably been cashing out in chunks
People are retarded

@monhannoero

learn to tineye next time, newfag

Actually Yandex

So the moral of the story is that once we have fiat pairing with top 50 allts the dominance (and value) of ETH and BTC will slowly but severely decrease as they will lose their "gateway" status right?

Whales do not look at the spot price, or the market cap (which is just based on the spot price AND total known tokens).
What matters the most to them is LIQUIDITY.

Even moderately sized dolphins (not whales, i.e. >20 btc) are most likely looking at liquidity.
You'll know when you reach a point where dumping into the buy side of an altcoin's order book will lose you a TON due to slippage.

At that point, you start looking at the entire order book ALWAYS, and you ALWAYS need to know how deep you can dump into the book, and how much you will get when you do.
THIS becomes the important metric, spot price STOPS mattering. It could go up/down 10-25%, and it doesn't matter if the order book is so thin that you end up with no considerable difference (in the magnitude you are trading at) when you dump.

In this sense, most whales are just playing against other whales, and everyone else is just riding the waves.

This is why whales go stop hunting/margin-hunting. This is additional liquidity not shown in the order books.

So if you are trying to gauge the USD value of the market via marketcap, stop. You need to gauge it via how liquid the market is (e.g. for a whale with 10,000 btc, how much can they reasonably cash out at any moment based on the books?) And if you are a specific altcoin's whale, you have to estimate your liquidity by how much BTC you'll get if you dump down the book, THEN you can know how much dumping power you'll have in the BTCUSD books.