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How one does explain that the price of Ethereum follows the price of Bitcoin, while both networks are separated, and follow a different roadmap?

by antpls 5y ago

georgyo 5y ago
Arbitrage. Many exchanges deal only in crypto currencies, where exchange rates are relative to other coins. Price differences between both coins and exchanges create an ability for someone to make money while equalizing the market. It also means that all coins are inevitably linked together in some way. And why obvious scam coins also follow same curves.
- fighterpilot 5y ago
  Arbitrage isn't the fundamental explanation. There's no pure arb relationship between ETH and BTC. The real reason they're linked is for macro reasons. Hype for ETH is correlated with hype for BTC. Regulatory environment for ETH is correlated to that for BTC. Statistical arbitraguers then front run the resulting macro flows, but the core reason they're linked is the macro flows, not the arbitrageurs.
shepardrtc 5y ago
Market makers. They have to determine a price, but ETH hasn't yet evolved to a point where it operates in its own world, so they lazily (but understandably) follow the price fluctuations of BTC while allowing people to buy or sell within a certain range. Obviously if a huge buy comes in, or a lot of people are buying, they'll let it go up (or down if its the opposite), but once that dies down they'll again follow BTC price swings. However, I expect this to change as cryptocurrencies mature.
- fighterpilot 5y ago
  Market makers can't force a correlation to exist. They're neither a sufficient or necessary condition for it. They only front run an already existing correlation. The correlation exists because of non market makers.
vghhfvg 5y ago
ETHBTC is up 40% this month. The chart is totally chaotic. ETHUSD (sometimes) goes up after Bitcoin does because people hear about ETH after they hear about bitcoin - most price movements in either pair are due to new money. The prices of all cryptocurrencies also respond together to any regulatory threat. The weak correlation between ETHUSD and BTCUSD has many obvious explanations. Most things crypto are suspicious. I don't think there is anything suspicious about the ETHBTC chart. Edit - This may be informative: https://en.wikipedia.org/wiki/Beta_(finance) https://en.wikipedia.org/wiki/Beta_(finance)

How one does explain that the price of Ethereum follows the price of Bitcoin, while both networks are separated, and follow a different roadmap?

by antpls 5y ago

How one does explain that the price of Ethereum follows the price of Bitcoin, while both networks are separated, and follow a different roadmap?

georgyo 5y ago

Arbitrage. Many exchanges deal only in crypto currencies, where exchange rates are relative to other coins. Price differences between both coins and exchanges create an ability for someone to make money while equalizing the market. It also means that all coins are inevitably linked together in some way. And why obvious scam coins also follow same curves.

fighterpilot 5y ago
Arbitrage isn't the fundamental explanation. There's no pure arb relationship between ETH and BTC. The real reason they're linked is for macro reasons. Hype for ETH is correlated with hype for BTC. Regulatory environment for ETH is correlated to that for BTC. Statistical arbitraguers then front run the resulting macro flows, but the core reason they're linked is the macro flows, not the arbitrageurs.

shepardrtc 5y ago

Market makers. They have to determine a price, but ETH hasn't yet evolved to a point where it operates in its own world, so they lazily (but understandably) follow the price fluctuations of BTC while allowing people to buy or sell within a certain range. Obviously if a huge buy comes in, or a lot of people are buying, they'll let it go up (or down if its the opposite), but once that dies down they'll again follow BTC price swings. However, I expect this to change as cryptocurrencies mature.

fighterpilot 5y ago
Market makers can't force a correlation to exist. They're neither a sufficient or necessary condition for it. They only front run an already existing correlation. The correlation exists because of non market makers.

vghhfvg 5y ago

ETHBTC is up 40% this month. The chart is totally chaotic. ETHUSD (sometimes) goes up after Bitcoin does because people hear about ETH after they hear about bitcoin - most price movements in either pair are due to new money. The prices of all cryptocurrencies also respond together to any regulatory threat. The weak correlation between ETHUSD and BTCUSD has many obvious explanations. Most things crypto are suspicious. I don't think there is anything suspicious about the ETHBTC chart. Edit - This may be informative: https://en.wikipedia.org/wiki/Beta_(finance) https://en.wikipedia.org/wiki/Beta_(finance)