Trading Altcoins in Satoshi Value

Trading Altcoins in Satoshi Value

By ashr | Learn to Trade Crypto | 2 Apr 2019


Days like today should teach new traders the difference in valuing alts in sats and in USD. Sure USD prices are up. But sats prices are down. When you’re buying and selling an alt in sats, if you sell when it’s up in USD but not sats, you’re literally trading away Bitcoin.

LEARN TO TRADE WITHIN YOUR TRADING PAIR. USD (OR ANY FIAT) IS NOT THE PRIMARY IN MOST ALTCOIN TRADING PAIRS.

You must learn to trade relative to bitcoin, as accumulating satoshis is the way to win this game.

Here's an example: Start: 100k sats is worth $5. Alt coin is worth 100k sats. You buy 1 altcoin at 100k sats.
Scenario 1: 100k sats is now worth $4. Alt coin is now worth 100k sats.
Scenario 2: 100k sats is now worth $6. Alt coin is now worth 100k sats.
Scenario 3: 100k sats is now worth $5. Alt coin is now worth 120k sats.

With #1, you stay where you are, but you've stayed the same in satoshi value, down 20% in USD.

With #2, you're up 20% in USD but not Satoshi. (This is today's situation)

With #3, you're up 20% in satoshi, the same 20% in USD.  

This example highlights the issues in valuing in USD.

#3, you'd realize your satoshi gains by trading back to BTC.

#1&2 there are not trades to be made, but #2, people trading USD value may make a trade.

To people trading USD value, #2 &3 look the same, an alt going from $5 to $6 USD.

The difference is that in #3 the alt is outpacing BTC growth, while in #2 it's just pacing BTC growth. #2 is not a trade to be made.

#3 is the only trade to be made.

If you make a trade to capitalize on USD gains like in #2 , you must trade to USD, not BTC, trading to BTC you have the same 100k satoshis you had before the trade, minus trading fees.

Days like today, you should see that Bitcoin is up, your sat prices are down, and yet in USD value, your alts look like they're having good days. They're not.

In the case of many alt coins you only get to USD through BTC. Trading alts into BTC to make USD gains with no intent to go to USD immediately, you are not actually profiting except rarely by luck.

The only success to be found in trading USD value is if USD is part of the trading pair or your goal is to reduce your BTC balance.

Don't trade away your BTC by valuing altcoin:BTC pairs in USD. More Bitcoin always is worth more USD.


P.S. This is my first post on Publish0x, please let me know if there are any issues with my formatting or anything. Thank you!



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