Investing in altcoins is a hedge over Bitcoin how true is this?

Sophokles

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Quote from: Obim34 on December 03, 2023, 02:06:19 AM

Just imagining, what would make Bitcoin crash in this kind of state where many people are now indulging into Bitcoin, even countries are now making it as of Legal Tender and even accepting it as part of their currency, I do not see that day coming.
Bitcoin price serves to regulate the price of other cryptocurrency as a bull in Bitcoin leads to a bull in other altcoins and any dip leads to more dip in this Altcoins so anything that leads to wipe out of Bitcoin, no other currency will be spared. Some of this Altcoins totally don't follow the rise and fall in Bitcoin, I would consider them as the shitcoins as they will make wave in the market and then in few seasons die off.
There you will begin to see other cryptocurrencies coming out to claim relevance but it now based on imagination as nothing of such can happen.

There can be anything and not sure how to express this but it is not that hard to manipulate the market. Just think there is a new issue with binance or saylor and a fud being spread in the market that they are going to liquidate their assets in the market. What will happen in this scenario in the market? This will surely have a very bad impact and people can panic to sell off their assets and withdraw their funds to their non custodial wallet. This is crypto market and you should not be so sure about anything in here. Anything can change in a matter of minutes.

Husires

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Most altcoins derive their value from Bitcoin and stablecoins, and the collapse of the price of Bitcoin will put pressure on stable currencies, and therefore both effects will cause the market to decline, in addition to the fact that most altcoins have limited liquidity compared to Bitcoin, so the decline of Bitcoin will necessarily affect that liquidity, making prices fall sharply.

When you plot the Correlation Between Bitcoin Price and Altcoins you will notice a correlation between them.

Obim34

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Just imagining, what would make Bitcoin crash in this kind of state where many people are now indulging into Bitcoin, even countries are now making it as of Legal Tender and even accepting it as part of their currency, I do not see that day coming.
Bitcoin price serves to regulate the price of other cryptocurrency as a bull in Bitcoin leads to a bull in other altcoins and any dip leads to more dip in this Altcoins so anything that leads to wipe out of Bitcoin, no other currency will be spared. Some of this Altcoins totally don't follow the rise and fall in Bitcoin, I would consider them as the shitcoins as they will make wave in the market and then in few seasons die off.
There you will begin to see other cryptocurrencies coming out to claim relevance but it now based on imagination as nothing of such can happen.

justdimin

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Quote from: arufox on November 24, 2023, 03:33:50 AM

I think, only meme coins can offer hedging benefits but a broader scope like Defi, meme coins, and privacy cryptocurrencies. All of them can act as safe havens against Bitcoin as their ability to act as a hedge and safe haven varies depending on whether the market is in a bubble or non-bubble period.

Hedging means to reduce risks. So how come it was the meme coin are fit for it when we know that they are very risky? Most DeFi projects are risky as well. Aren't you aware that lots of hacks and scams have occurred on them on the past? And this makes them to be weaker now. As for the privacy crypto, they are also being sued by the SEC. So, I don't think they are a good choice to hedge with our money.

Never heard any crypto to be honest that are being termed as a safe heaven other than Bitcoin. The market of cryptos can move up and down but no it is not a bubble as some people are claiming. If it's a bubble then why it survive this long?

DaNNy001

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Quote from: Kelward on November 24, 2023, 05:21:04 AM

Quote from: Epaper on November 23, 2023, 05:16:12 AM

Investing in altcoins is a hedge over Bitcoin is not entirely correct. Altcoin prices often have a correlation with Bitcoin prices. If the price of Bitcoin goes down, altcoins also tend to experience a decrease in price. Most of the altcoins are still highly dependent on Bitcoin price movements because Bitcoin is still the dominant cryptocurrency with strong market influence. If Bitcoin suffers a significant decline, altcoins can also be affected by negative market sentiment.

Bitcoin is the first cryptocurrency and it remains the pacesetter for every crypto coin today, this is an undisputable fact in the crypto space. Altcoins are looking to take the advantage of the coming bitcoin ATH and bull run, to also increase their assets with more investors that will be looking for alternative coins to invest and increase their profits. Without bitcoin, I doubt that we can have any significant altcoin bull run, because none can compere to the influence of bitcoin in the crypto market.

Altcoins remain alternatives to bitcoin, and for now bitcoin still dictates the bull and bear runs, for cryptocurrencies.

Bitcoin is still more preferable and everyone in the crypto space is well aware of this and that's why most long term investor that consider buying Bitcoin like also considering altcoins but they only do this only in a period like this when the bull is somehow getting close because most altcoin tend to boost very fast which for these investors is still worth trying as they can edge ofd some profits in short time with their real investment still intact with the supreme coin@bitcoin.

Blitzboy

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Quote from: Samlucky O on November 23, 2023, 08:46:15 PM

Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

I think this smaller investors has no potential to make the bitcoin price to crash. Even if bitcoin price doesn't go the way they expected it to be, I don't see that as a possibility of bitcoin crash. Because smaller investors have little amount invested in bitcoin and even if they pull it out, it will not affect anything. If it were to be big holder of bitcoin like micro strategy and some other big investors with higher shears on bitcoin I would have given it a thought. But even if higher adopters pull out from bitcoin I don't even see it crashing. Because the demand of bitcoin is high and if they decide to sell all what dey have in there custody people would gladly buy and stack knowing truewell that bitcoin will still be bullish.

You dont see how important small buyers are to the Bitcoin market as a whole. Small players may not be able to change the market by themselves, but when they work together, they have a lot of power. Think about this: Bitcoin's value isnt just measured by its market capitalization; its also measured by how many people use it and believe it. A domino effect can happen if a lot of small buyers lose faith and pull their money out. This can change how the market feels and could cause prices to drop. You're wrong to think that the market is only affected by what big players like MicroStrategy do. In fact, Bitcoin lives off of the faith of all of its investors, no matter how big or small. Ignoring the possible effect of smaller investors is to miss the point of Bitcoin's decentralized structure.

Kelward

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Quote from: Epaper on November 23, 2023, 05:16:12 AM

Investing in altcoins is a hedge over Bitcoin is not entirely correct. Altcoin prices often have a correlation with Bitcoin prices. If the price of Bitcoin goes down, altcoins also tend to experience a decrease in price. Most of the altcoins are still highly dependent on Bitcoin price movements because Bitcoin is still the dominant cryptocurrency with strong market influence. If Bitcoin suffers a significant decline, altcoins can also be affected by negative market sentiment.

Bitcoin is the first cryptocurrency and it remains the pacesetter for every crypto coin today, this is an undisputable fact in the crypto space. Altcoins are looking to take the advantage of the coming bitcoin ATH and bull run, to also increase their assets with more investors that will be looking for alternative coins to invest and increase their profits. Without bitcoin, I doubt that we can have any significant altcoin bull run, because none can compere to the influence of bitcoin in the crypto market.

Altcoins remain alternatives to bitcoin, and for now bitcoin still dictates the bull and bear runs, for cryptocurrencies.

arufox

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I think, only meme coins can offer hedging benefits but a broader scope like Defi, meme coins, and privacy cryptocurrencies. All of them can act as safe havens against Bitcoin as their ability to act as a hedge and safe haven varies depending on whether the market is in a bubble or non-bubble period.

Sayeds56

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Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

It is indeed realistic expectation that altscoins will follow Bitcoin, either it is crash or surge. This aligns with my observations over the years in cryptocurrencies market. Bitcoin's widespread recognition is based on its inherent qualities that make it an outstanding asset and method of payment. It is important to note this popularity and confidence of investors is not result of any advertising campaign.

There are several promising projects like Ethereum, Solana, ADA , DOT and others in altscoins market, hold the potential for strong performance in upcoming bullish market.

Samlucky O

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Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

I think this smaller investors has no potential to make the bitcoin price to crash. Even if bitcoin price doesn't go the way they expected it to be, I don't see that as a possibility of bitcoin crash. Because smaller investors have little amount invested in bitcoin and even if they pull it out, it will not affect anything. If it were to be big holder of bitcoin like micro strategy and some other big investors with higher shears on bitcoin I would have given it a thought. But even if higher adopters pull out from bitcoin I don't even see it crashing. Because the demand of bitcoin is high and if they decide to sell all what dey have in there custody people would gladly buy and stack knowing truewell that bitcoin will still be bullish.

Epaper

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Investing in altcoins is a hedge over Bitcoin is not entirely correct. Altcoin prices often have a correlation with Bitcoin prices. If the price of Bitcoin goes down, altcoins also tend to experience a decrease in price. Most of the altcoins are still highly dependent on Bitcoin price movements because Bitcoin is still the dominant cryptocurrency with strong market influence. If Bitcoin suffers a significant decline, altcoins can also be affected by negative market sentiment.

SlimShadyMmp

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Sometimes BTC dumps and altcoins dumps too maybe even harder but most of the times when BTC makes a recovery Alts not all can make significant gains on the way up especially the ones that gets their hype right at the time or projects that tends to gets their updates announcement right around recovery

Mpamaegbu

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Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same

It's an observation I've also come to make too. Whenever Bitcoin dips, alts (most) also dips. Bitcoin activity is a precursor to alts behaviour. If anyone watches closely they should be able to decode all that. Most times I take my cue from Bitcoin to find entry points in alts I'm buying. It's the same pattern that makes alts gain momentum and push into bull rally after Bitcoin must've had its. Investors take out the profit they make during Bitcoin bull and ploy into alts to chase further profit and that gives rise to bullishness in alts. I expect that scenario to come up again when Bitcoin records a new ATH after its halving.

Silberman

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Quote from: libert19 on June 23, 2023, 11:02:15 PM

Untrue, hedging with alts won't work as long as Bitcoin is king of market.

And since this is never going to change then we can discard the possibility of using altcoins as a hedge against bitcoin or any other asset, when people think of a hedge they often think on some of the most solid investments you can make, like real estate, gold and now they think of bitcoin as well, altcoins in general are not something we can associate with being a solid investment, and since this is never going to be the case we must forget about this idea of using altcoins in this way.

Rampagoe004

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This is something ambiguous. This is true but also not. What we have seen in recent years is that ALtcoin will follow the price of Bitcoin. This happens because of the system and market psychology. Everyone thinks Bitcoin is King. If the king has fallen then psychologically people will sell their altcoins too.
If BTC experiences a price increase, there will be many new investors who will buy BTC and they will definitely buy ALtcoins.

This is how trading in cryptocurrencies works.

libert19

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Untrue, hedging with alts won't work as long as Bitcoin is king of market.

Rengga Jati

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Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future ....

What happens is just the opposite, the altcoins market usually follows Bitcoin. If Bitcoin falls, then the prices of most altcoins will also fall. There may be some that don't, but the comparison is very small. Most of course will follow the Bitcoin price. We've encountered it many times, both in bearish and bullish. Both in the era of positive trend and negative trend.

Hypnosis00

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Quote from: Silberman on June 23, 2023, 02:55:15 PM

Quote from: avikz on June 23, 2023, 01:03:25 PM

Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

Surely it's a hedge but a bad one! You agree or not, but when Bitcoin drives down, the entire market follows the same trend. So using altcoins as a hedge to Bitcoin is a bad choice which will surely bring financial disaster.

If you really want to hedge, buy gold. It will not give you a huge amount of return but it will surely protect your capital. Gold can be a good hedge for the economic downturn as well without any doubt. Look at its historical data.

True, anything can be used as an hedge to try to protect yourself from a market downturn, but this does not mean the hedge will be any good, and we have historical evidence this is the case for altcoins, altcoins have a high correlation with bitcoin, basically meaning that they follow closely the movements of bitcoin, so if bitcoin goes up altcoins go up and when bitcoin goes down then altcoins go down as well, however the magnitude of the altcoin movements is higher, meaning that when bitcoin goes down and crashes, the crash that altcoins suffer is even greater.

That's the reason why when there is a market crash, people are selling off their altcoins and buying Bitcoin as a scapegoat. We are thinking that Bitcoin would save us from losses if ever we stay in crypto during the bear season as the altcoins crash more than Bitcoin. And this is also the reason why Bitcoin always shows recovery first as the demand had grow faster dues to the switching status of the investors - from altcoins - Bitcoin. Maybe we can say it was the design of the market and if we are in crypto space for many years, we surely know the sentiment of the market.

Silberman

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Quote from: avikz on June 23, 2023, 01:03:25 PM

Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

Surely it's a hedge but a bad one! You agree or not, but when Bitcoin drives down, the entire market follows the same trend. So using altcoins as a hedge to Bitcoin is a bad choice which will surely bring financial disaster.

If you really want to hedge, buy gold. It will not give you a huge amount of return but it will surely protect your capital. Gold can be a good hedge for the economic downturn as well without any doubt. Look at its historical data.

True, anything can be used as an hedge to try to protect yourself from a market downturn, but this does not mean the hedge will be any good, and we have historical evidence this is the case for altcoins, altcoins have a high correlation with bitcoin, basically meaning that they follow closely the movements of bitcoin, so if bitcoin goes up altcoins go up and when bitcoin goes down then altcoins go down as well, however the magnitude of the altcoin movements is higher, meaning that when bitcoin goes down and crashes, the crash that altcoins suffer is even greater.

avikz

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Quote from: Promocodeudo on May 28, 2023, 06:01:48 AM

What makes people think that if Bitcoin crash other coins won't follow, it is practical expected event thats is bound to occur any period btc market slides other coins does the same because people has come to love this digital currency of the future that holds somany yet to discovered benefits to humanity, other altcoin are smaller community so they can never be compared with Bitcoin, note BTC no longer advertise itself but it's high demand rate and value does. This commodity (BTC) as I call it, can only crash if the smaller investors in the long run come to know that the growth rate is no longer obtainable as they learnt or were told earlier that it will be before they venture into it. If this events doesn't take place then we should only expect the bullish and bearish market as usual not the total crashing of this coin.

Surely it's a hedge but a bad one! You agree or not, but when Bitcoin drives down, the entire market follows the same trend. So using altcoins as a hedge to Bitcoin is a bad choice which will surely bring financial disaster.

If you really want to hedge, buy gold. It will not give you a huge amount of return but it will surely protect your capital. Gold can be a good hedge for the economic downturn as well without any doubt. Look at its historical data.

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