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RE: Bitcoin Tanks to $10,000 - Buy the Dip!

in #bitcoin7 years ago

That scenario is incorrect. Let's say you buy 1 unit of an altcoin for 10k Satoshi. There are two ways altcoins can change in price:

  1. The value of a Satoshi goes up. For example, let's say 10k Satoshi = $1 when you initially invest. That put Bitcoin at $10k (note that Satoshis are just a unit of Bitcoin like pennies are a unit of a dollar, meaning they will always be exactly 1/100,000,000th of a Bitcoin). Let's say Bitcoin doubles to $20k and your altcoin is still worth 10k Satoshi. Now your altcoin is worth $2. If you cash out to Bitcoin then sell Bitcoin, you'll get $2.

  2. The number of Satoshi that your altcoin is worth increases. Let's say that your altcoin increases to 20k Satoshi, but Bitcoin stays at $10k. Your altcoin is now worth $2. If you cash out to Bitcoin then sell the Bitcoin for USD, that's what you'll get.

In reality, a combination of these two occur which affect price.

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