Trading above market cap volume: possible??

akes2090

jr. member

Activity: 56

Merit: 4

Quote from: bohr on February 22, 2018, 08:35:56 PM

Quote from: lite on February 22, 2018, 03:09:46 PM

Quote from: akes2090 on February 22, 2018, 02:47:59 PM

Thanks for the clarity..it makes sense now.

But why is there so much of activity on the USDT front anyway Huh

Because USDT has markets on biggest exchanges like binance, bittrex,bitfinex etc..(https://coinmarketcap.com/exchanges/volume/24-hour/) people use USDT because in a sense it's much better than USD, one don't have to deal with banks, it saves time and fees between transfers.

Correct, this is precisely the reason Tether was created instead of having to exchange your bitcoin for dollars you can exchange your BTC for Tether, this way if the price of a coin goes down you retain its value in dollars and now you buy for a discount, this is what traders do and that is why it has such a high trading volume I do not expect too many coins to present that behavior but Tether is one of them

Thanks. Very interesting indeed. USDT has sparked new interest in me now.

In a similar light - what are your opinions about DGD (DigixDAO)? If I am correct - it is linked to gold which is a fairly stable commodity/safe haven. Apparently they are partnering with gold vendors where token holders can even redeem physical gold/bullion.

bohr

sr. member

Activity: 994

Merit: 257

Quote from: lite on February 22, 2018, 03:09:46 PM

Quote from: akes2090 on February 22, 2018, 02:47:59 PM

Thanks for the clarity..it makes sense now.

But why is there so much of activity on the USDT front anyway Huh

Because USDT has markets on biggest exchanges like binance, bittrex,bitfinex etc..(https://coinmarketcap.com/exchanges/volume/24-hour/) people use USDT because in a sense it's much better than USD, one don't have to deal with banks, it saves time and fees between transfers.

Correct, this is precisely the reason Tether was created instead of having to exchange your bitcoin for dollars you can exchange your BTC for Tether, this way if the price of a coin goes down you retain its value in dollars and now you buy for a discount, this is what traders do and that is why it has such a high trading volume I do not expect too many coins to present that behavior but Tether is one of them

Harlot

hero member

Activity: 1806

Merit: 672

Well a Volume is computed differently from a market cap.

Market Cap = Current Price * Total Circulating Supply
Volume = Number of times traded * Price each time it was bought and sold

So to keep it short if the asset is more than active during that day then we might see its volume greater than its market cap. Us most likely be bought and sold by traders during the day.

lite

legendary

Activity: 1400

Merit: 1009

Quote from: akes2090 on February 22, 2018, 02:47:59 PM

Thanks for the clarity..it makes sense now.

But why is there so much of activity on the USDT front anyway Huh

Because USDT has markets on biggest exchanges like binance, bittrex,bitfinex etc..(https://coinmarketcap.com/exchanges/volume/24-hour/) people use USDT because in a sense it's much better than USD, one don't have to deal with banks, it saves time and fees between transfers.

akes2090

jr. member

Activity: 56

Merit: 4

Thanks for the clarity..it makes sense now.

But why is there so much of activity on the USDT front anyway Huh

dothebeats

legendary

Activity: 3542

Merit: 1352

Cashback 15%

Quote from: akes2090 on February 22, 2018, 02:29:52 PM

I am perusing the Coinmarketcap website right now, and find the following data for Tether (USDT):

Market cap = $2,229,867,202
Volume (24h) = $3,031,250,000

Perhaps I don't understand the mechanics behind the trading - but how is it possible that the 24hr volume exceeded the market cap??

It is possible. Market cap simply means that it is the value of all existing USDT whereas volume means the amount of coins/money traded or swapped in X amount of time. Let's put it this way, TomatoCoin has a market capitalization of $2M, but the daily volume in Farm Exchanges produced a figure of $2.5M TomatoCoin exchanged. In this instance there were no new TomatoCoin added into existence but the circulating supply of TomatoCoin in the exchange has been traded back and forth for it to reach that figure. I bought 2 TomatoCoin @$4, and sold it @$5; I produced $9 worth of volume just by using 2 TomatoCoins.

akes2090

jr. member

Activity: 56

Merit: 4

I am perusing the Coinmarketcap website right now, and find the following data for Tether (USDT):

Market cap = $2,229,867,202
Volume (24h) = $3,031,250,000

Perhaps I don't understand the mechanics behind the trading - but how is it possible that the 24hr volume exceeded the market cap??

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