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I had a sidetake on that quoted bit. It’s been curious to me just how related all these coins are, even as speculation devices. When Bitcoin falls, they all f

I had a sidetake on that quoted bit. It’s been curious to me just how related all these coins are, even as speculation devices. When Bitcoin falls, they all fall, when it rises for the most part they all rise. The correlation to completely separate pots is something I don’t think anyone can fully explain.

drc500free 4y ago
Isn't it fully explained by most of the money being from speculators whose thesis is "if crypto goes big these will be worth more!"? If you add up the net worth of all the people who deeply understand how each coin works, you don't get anywhere near $500 billion.
adventured 4y ago
The correlation is very easy to explain. It's the same reason the bubble in tech stocks crashed in the same general time frame that all of the crypto crashed, and the housing market began to freeze up. It's risk off, as the Fed pushes up rates and investors and speculators grow increasingly fearful of more to come. The cost of debt and leverage also went up considerably. Or as Warren Buffett likes to put it, you can think of interest rates as gravity as it pertains to asset prices and speculation.
3np 4y ago
A major factor here is that, especially historically, the vast majority of trading volume for coins apart from BTC/ETH is priced in either of those two. Unless you have aggressive arbitrators and liquid markets with thick and deep order books, this means that smaller-cap coins end up tracking the major ones. It is only relatively recently that ETH significantly decoupled from BTC in this sense. There are also infinite ways to construct and weight a price index. Go to different websites and you will notice significant discrepancies. One doesn't necessarily have to be more "accurate" or "better" than the other. Right now everything seems to be tracking the NASDAQ, though...

drc500free 4y ago

Isn't it fully explained by most of the money being from speculators whose thesis is "if crypto goes big these will be worth more!"? If you add up the net worth of all the people who deeply understand how each coin works, you don't get anywhere near $500 billion.

adventured 4y ago

The correlation is very easy to explain. It's the same reason the bubble in tech stocks crashed in the same general time frame that all of the crypto crashed, and the housing market began to freeze up. It's risk off, as the Fed pushes up rates and investors and speculators grow increasingly fearful of more to come. The cost of debt and leverage also went up considerably. Or as Warren Buffett likes to put it, you can think of interest rates as gravity as it pertains to asset prices and speculation.

3np 4y ago

A major factor here is that, especially historically, the vast majority of trading volume for coins apart from BTC/ETH is priced in either of those two. Unless you have aggressive arbitrators and liquid markets with thick and deep order books, this means that smaller-cap coins end up tracking the major ones. It is only relatively recently that ETH significantly decoupled from BTC in this sense. There are also infinite ways to construct and weight a price index. Go to different websites and you will notice significant discrepancies. One doesn't necessarily have to be more "accurate" or "better" than the other. Right now everything seems to be tracking the NASDAQ, though...