USD pairs on popular exchanges could change everything
Bitcoin has been getting absolutely crushed this last week, and as you have likely noticed, it has dragged steem (and everything else) down with it.
However, what might happen if say, steem wasn't priced in BTC?
What if steem was priced in dollars, and euros, and yen, and yuan, and several other currencies?
Would it be more resilient to big btc pullbacks like we are seeing currently?
You betcha!
What is potentially exciting is that USD fiat pairs are not something that we can talk about only in theory.
They are likely on the way!
A few days ago a big development was uttered by the CEO of Bittrex.
I wrote about it at the time here:
https://steemit.com/bittrex/@jrcornel/bittrex-possibly-adding-dollar-on-off-ramps
Basically it sounds like the CEO of Bittrex is talking about adding dollar on/off ramps as well as possibly adding dollar pairs.
That would be an absolute game changer in this space and would allow each project to be valued much more accurately.
More accurate project valuations?
Currently we have(had) projects that were valued in the hundreds of millions of dollars with very little in the way of fundamentals backing them.
Some were even outright scams.
As long as bitcoin went up and they were priced in terms of btc, they enjoyed increased valuations.
I am thinking that this potential change at Bittrex could be an industry wide change and could help provide much more accurate valuations going forward.
I am thinking over the next year we will see many exchanges start to price more coins with fiat pairs as opposed to just btc pairs.
This could be good for some coins and bad for others, but either way, it will likely make for a lot more accurate pricing of cryptocurrency projects.
More accurate valuations will be good for some projects and not so good for others.
The positive for something like steem, which is seeing it's steemit.com website numbers off the charts right now, yet it's currency sitting at 2 month lows, is that it's wagon would no longer be hitched solely to btc.
In an environment like we are in currently, with btc dragging everything down, that would be a very good thing.
Things are going to change a lot in this space this year, strap in for the ride.
Stay informed my friends.
Image Source:
https://www.coindesk.com/new-viabtc-exchange-use-bitcoin-cash-base-trading-pair/
Follow me: @jrcornel
I´m saying this for months and I really hope, that we now have the chance to take this step and become independent from the damn Bitcoin! (May he RIP!)
It simply makes no sense to valuate any project compared to an outdated dying technology.
I really hope that the exchanges will safe crypto as a whole and give us fiat trading pairs! (...and I still hate the idea, how powerful and influential the centralized exchanges are! Please let´s not mention Tether etc)
USD and other fiat pairs will happen for sure, it is just a meter of time.
Short term maybe this is bad for BTC but long term is good. Every crypto need to have their own reason to exist and not to go up and down because of BTC. BTC is digital gold and will be less volatile when people start pulling out money from alts.
USD and fiat pairs will have a couple of interesting effects:
Bitcoin has many flaws. It's based on obsolete technology from 2009, the processing times are too slow, it requires massive amounts of energy to process, and the fees are too high. The quicker it gets replaced the better.
Great point! There is no reason that steem should be selling off this hard considering the amazing community muni ties jolt on top of it. The fear everyone has surrounding bitcoin is definitely dragging us down with it for no good reason! I agree USD pairs will help Steem for sure.
It will be great once Bittrex add the USD Pairs and we can also deposit into Bittrix.. should help out alot.
So this is what interests/concerns me about all altcoins. If the prices of bitcoin goes way down people are just pulling money out and in the stock market you normally see other categories go up during a correction. Stocks go down, bonds usually go up. In the crytpomarket bitcoin crashes and every other of top 100 all crash as well. Investors are not selling bitcoin to buy something else as is the common practice with other type of investments. Outside of general fear or price manipulation ( which is becoming more evident with the ability to short some of these now ) only safe haven is to hold fiat and try to wait it out which only makes matters worse. Perhaps not tying BTC to all other coins could solve this. I would certainly like to see more predictability in how these markets work and so would most new investors.
That is an interesting point. I wouldn’t say there’s a safe haven crypto. Like you said when bitcoin is down the rest go with it. The only option is to cash out into fiat. This defeats the purpose of allocating in if you’re just going to cash out to avoid the “crash.” I guess Tether was a solution to this but we all know that’s got some potential fraud or bad news likely coming soon. Until then I really feel like buying into the top coins then turning off all news and market updates for the next 12 months is the way to go!
Since I'm new to this I'm going the route of dollar cost averaging. I've put in a small amount to start and will try to buy more each month at a predictable time. The key will remain disciplined during the large movements. After 6 months I plan to re-evaluate and see if this is for me. In the mean time I'll be researching smaller coins with less market share that have true potential for mass appeal. With so many options now that may be much harder than it sounds. 12 months from now I may not be able to stomach the large sways if they continue month after month and look to move these investments with less risk.
Kraken currently does this... they have most major currencies. I used to use CAD to price cryptos since that's what I earn... but it became difficult to think that way when things were going up and down very fast. Bitcoin brought some stability to the situation. But you do bring up a great point regarding bitcoin weighing down other cryptos. I'm not sure if trading in dollars will completely correct this as large stocks do the same thing on the NYSE... it's due to the competition for liquidity. When bitcoin starts to fall traders will see it as a buying opportunity and sell other coins to raise the cash. If it drops 50%+ like it currently is doing, a lot of traders start to think it's a great time to get back in.
Yes, that is a good point, but at least it won't be in lock step with each other. In fact if steem were to have positive development, it could go up when bitcoin was tanking. That is virtually not possible in the current environment.
True. there are benefits to the current method if you have a stomach for the volatility. any coin that is dropping solely because of bitcoin is under-priced creating some great buying opportunities. I've been shopping
Would certainly add much more liquidity to the broad crypto market and possibly, reduce correlations between assets. Will be curious to see which banks allow their US customers to transfer fiat to a crypto exchange though...
You wouldn't have to buy in USD... you could transfer bitcoin (or whatever your pleasure is) and sell to USD on the exchange. They don't even need to let you transfer it out necessarily, they just need to give you the ability to hold it (like tether but with actual dollars). I'm not sure it will make too much difference, since it doesn't introduce new liquidity (most investors aren't adding USD and just going from crypto to crypto). It would just wipe tether out.
If bitcoins are created out of thin air doesn't that mean that their inflating their bitcoins and decreasing their value?
No, because the entire timeline is outlined the net present value takes that into consideration. It's not the change in the money supply as is taught that causes inflation, it's actually the change in the rate of change. When the data changes the value changes... that's why all the price action on USD etc. occurs when rates change (or tax bill gets passed etc.), all future changes are getting priced in. At least in theory... reality is slightly different, but it starts to get complex.
Nice Post! Finally some good news for cryptocurrency.
Bitcoin price also started to act accordingly :) Please have a look at my technical analysis.
https://steemit.com/bitcoin/@pozzecco/6700usd-might-be-dip-of-the-bitcoin-i-don-t-say-it-the-moving-averages-says-so-check-it-out-bitcoin-technical-analysis
Great info. Thanks we really need all the good news we can get on crypto now. Bitcoin went to $6000+ but it bounced back up. Happy about that.
Upvoted, vote me too please https://steemit.com/blog/@rsrestinga/kapitakof-earn-rublos-359a0d8a6a
It is a very sad situation :( Thank you for sharing with us @jrcornel
I think it will be a 'game killer' rather than a game changer.
This is crypto not stock, any attempt to pair crypto and fiat will be tantamount to pairing light and darkness.
I think, we in cryptosphere are better off with crypto pairs.
As regards appropriate project valuations, Bitcoin still serves the purpose despite the volatility.
Thanks @jrcornel for informing us.