When $BTC rallies, trolls point and laugh at $ETH.
When $ETH rallies, trolls point and laugh at $BTC.
But both miss the point: $BTC & $ETH feed into each other.
Been watching this dynamic play out since Q1 2016.
When $ETH rallies, trolls point and laugh at $BTC.
But both miss the point: $BTC & $ETH feed into each other.
Been watching this dynamic play out since Q1 2016.
$BTC rises relative to $ETH? That means more $ETH can be bought with each $BTC...typically leading to an $ETH that rises in USD and BTC-terms, once $BTC pauses.
Since $ETH is more illiquid & higher risk than $BTC, it tends to overshoot $BTC's gains in a bull market, ultimately ending up higher than it started in $ETHBTC terms...
...then allowing more $BTC to be bought with $ETH, and so the cycle continues.
...then allowing more $BTC to be bought with $ETH, and so the cycle continues.
To better grok the impact of (il)liquidity and law-of-large-numbers, consider that in the last mini #bitcoin-rally, $BTC added ~$40B in network value, more than $ETH's current total ~$35B network value: blockchain.com/charts/market-…
Some may point out that in 1H 2019 & again recently, $ETH led $BTC.
I think this has less to do w/ liquidity mechanics, and more to do w/ $ETH drumming up interest in crypto that overflows into $BTC.
Once a bull-cycle gets going, the above feedback loop is definitely in play.
I think this has less to do w/ liquidity mechanics, and more to do w/ $ETH drumming up interest in crypto that overflows into $BTC.
Once a bull-cycle gets going, the above feedback loop is definitely in play.
More broadly, we also see this sloshing of capital between $BTC and non-BTC/non-ETH #cryptoassets through uptrends, as described in May 2019 👇
A lot has changed even since May 2019. Most importantly, there are dozens of high-quality #cryptoassets in the market that have better fundamentals and well-understood means of accruing value: placeholder.vc/blog/2019/4/26…
"Sloshing" can drive short-term price action, but fundamentals drive long-term value creation.
While the above dynamics are interesting and helpful in a bull-cycle, they can also bite-back hard in a bear-cycle.
So spend most of your time on fundamentals and long-term value 🙂
While the above dynamics are interesting and helpful in a bull-cycle, they can also bite-back hard in a bear-cycle.
So spend most of your time on fundamentals and long-term value 🙂
*assuming the ERC-20s grow in USD-terms faster than ETH does. The quality ones tend to do so in a bull market, in other words:
ERC-20s are to ETH, what ETH is to BTC.
While I'm here, is there a site that shows real-time metrics of the value of all tokens built atop #Ethereum?
ERC-20s are to ETH, what ETH is to BTC.
While I'm here, is there a site that shows real-time metrics of the value of all tokens built atop #Ethereum?
This was despite $ETH having a larger move (~33%), and $BTC having a smaller move (~10%).
