Topic: Why stable coins/tokens always go opposite to all altcoins (Read 316 times)

Everybody would create a big stable for themselves if they could, but Tether has the biggest of them all, as far as I know.
I will try to give your article presented a try a bit later, thanks for it.

Well yes that is some good advice for us investors. But there is a new Stablecoin that is going to be coming out now I am watching for. London-based Fintech giant and digital bank called Revolut will now have a Stablecoin.
I am sometimes not sure if that is a good idea for us to have so many Stabecoins.But just last year Tether reported $5.2 Billion in profits in the first half of 2023.
So we know why there is so many companies that want them. https://www.forbes.com/sites/davidbirch/2024/09/19/revolut-joins-paypal-in-the-stable-of-stablecoins/

Sounds pretty reasonable to me.
So we can say it happens due to human and market nature, in a way.
And it's alright.

I think the logic is very simple. I would have to ask you a question to simply explain how this thing really works. Okay, let's go! When the price of Bitcoin is bullish and you are having some stable coins in your portfolio, what are you going to do with your stable coins like USDT? Sell to buy Bitcoin or still holding? I guess you are going to sell part of your USDT which ie a stable coin, if not all to purchase Bitcoin or any altcoins that are bullish.

The same things happens when the price of Bitcoin or altcoins is going bearish. What will be your decision when you see that your Bitcoin holdings is depreciating? You going to swap to stable coins? I guess you are going to swap it immediately to stable coins so that the volatility of the market does not have much effects on your Bitcoin or altcoins holdings.

This will happen in our dreams. Though there are cases when the stablecoins would be @$1 value, but in most cases, it's often less than $1. This gets me wondering if it's truly backed by the USD, especially the most valued and popular USDT that is not so transparent.

Well, what you explained is another fact to buttress my earlier stance on this, stablecoins are not truly stable but they are termed stable because they are not as volatile as the normal cryptocurrencies. However, I've not paid attention to your observation, I only swap my volatile coins/tokens with it and closed my eyes because the value change of the one I use most (USDT) is always insignificant, and so is checking it on the graph, you will be seeing almost linear pattern...lol.

The slight variation is where I believe the developers are making their money, so it's cool by me.

On CoinMarketCap, and for all I know probably on many or most similar aggregation sites, changing which currency you want them to display the data in does not in reality actually work.

I have been suspecting that the root cause might be that in reality they do not actually have or collect or retain the underlying data for currencies other than their default one, which in the case of CoinMarketCap might be USD but even if not USD is very likely some other fiat.

For example if you ask them to show you the tables for (in) BTC rather that for or in USD, you can see that those red and green colours are incorrect; coins that you can easily verify have actually been going down in bitcoin price will display as green rather than red if they have been going up in [site's base/default currency] price and conversely, coins you can easily verify to have been going up in bitcoin price will show as red rather than green if they have been going down in [price as denominated in the site's base/default currency].

Because almost all such sites (as far as I am aware) use some species of fiat as their base currency, they are probably almost all basically lying to you almost all the time.

It is important to remember that fiat itself, all fiat that I know of anyway, is almost always going down, the coarser the granularity of time you look at the less of the grains of time will show them going upward.

If you compare them to more-stable things - usually commodities such as gold but also even perishable commodities such as bread and milk and eggs, the larger span of time (aka courser granularity) the more likely you will find fiat has gone down in value as priced in such commodities.

To me the upshot of this is that a site of that kind but using as its base/default currency bitcoin would be much more useful, although more useful still would be one that actually retained the data for each of the currencies it claims to be able to show you the data in instead of storing the data as based on one of them yet pretending to be able to show the data in terms of the others.

The tables the Galactic Milieu periodically updates at http://galaxies.mygamesonline.org/digitalisassets.html purporting to show values as expressed in various of the assets "get away with" converting the values from the Latest Rates include-file precisely because that file's actual purpose is precisely to enable such conversions; the values in the file are results of convergence, re-calculating the values over and over and over again until a "diff" between the results and the previous iteration's result find no difference between them.

That is of course also to say that they are synthetic results, based not on the vagaries of "spot markets" but rather on a sort of "fundamental or intrinsic value" possibly somewhat akin to the way someone in the liquidation / company-breakup business (like the penny-stocks folk who noticed the non-penny stock market had plenty of juicy breakup targets due to basing valuations on earnings rather than on actual real-estate and such held so snapped up such targets and broke them up from their real-estate holdings so the aspect valued by valuators who valued based on earnings versus price got the part they liked but that part became a leaser of the real-estate, which was moved to presumably entities that in the process maybe ended up in the penny-stock folks hands? I don't really know the nitty gritty of that story but that is the gist I got of it) might value stuff: what does it have in its pocketses...

(Obviously of course BTC, LTC and NMC, also shown in that table but lacking "official treasuries" aka "what is in their pocketsessss", have to have their value according some aggregator such as Coin Market Cap plugged in at the start of the iterations and not changed during the iterations that potentially could, and are intended to, change the values of each of the others until an iteration results in no change.)

(Also obvious of course is that it helps to know what they all have in their pocketses, the game knows this because it needs to in order to calculate this "simulation of efficient markets" and would probably be a better simulation of inefficient markets if it didn't iterate all the way to convergence and maybe even picked at random, or based on some "transparency of each asset's operations" probability, which assets to assume to be aware of which other assets' nitty gritty details on any given iteration or some other fuzziness factor. Going all the way to convergence is however prevented from being a simulation of "too ridiculously efficient markets" by actually only knowing what is in the pocket known as "official treasury", nothing at all about "slush funds", and not taking into account any planets, military units, magic swords, magic shields, player accounts, character accounts, characters, what the characters have in their pockets and so on and so on and so on, in short "game items", including all non-"reserve" assets which means assets not eligible for inclusion in "official treasuries".)

-MarkM-

everything is very simple. if the market goes up then people buy coins but not stable coins. that's why the value of the stable coin in relation to altcoins is reduced. if the market goes down then everything happens the other way around. people sell cryptocurrencies and get stable coins in order to fix their positions

It's not a rare sight that sometimes stablecoin will fluctuate when overflowed with demands or supplies. But, ofcourse that's not too much compared to other cryptocurrency and after all the market volume comes purely from people anyway. I guess what he means is sometimes the price could make abnormal fluctuation which oppose these stablecoins' nature.

I don't really know what you mean stable coins always go opposite to all altcoins.
No matter how much stable coins going up/down, it won't affect too much because it has stable value, although sometimes the value fluctuates a bit. When altcoins price up, it means many bought altcoins with their stable coins for example usdt, then no wonder usdt price will go down a bit.

Stablecoins are stable in price right? That is, they do not grow like other coins. Therefore when the market is green, nobody will like to be in stablecoins since it will not grow thus moving or selling to their preferred coins which leads to stablecoins being in red. Also when the market is in red, most people will like to protect their funds thus they will convert or sell to stablecoins which makes the stablecoins to be in green.
This is a common practice in the crypto space.

I think if it has nothing to do with the supply and demand. Can you tell me what's your point to say like that? it's well said that if this case supply and demand doesn't matter. People just wanna try to make sure they can get the safe place to secure their profit and get a new market to generate more decent profit too. When someone convert his money from altcoin to the usdt and it can be considered as a profit taken

Because they are pegged in something, so when all the market goes to some direction the stablecoins tends to stay at the same price, since we see a trade pair on it it's normal to see one side up, when another is down.

Stable coins will remain stable even though the market price will dump. In most cases that many crypto holders will convert their altcoins into USDT/TUSD in order to save from losing. That is why we could see that the volume will go high but not the price itself. I can't see this stable coins to move up and down cause definitely, the value of this coin never moves or even change its color from green to red.

Just like this theory in Economics "The supply/demand equation states that given all else is equal, in a competitive market, the price of a particular product will vary until it reaches economic equilibrium"
The same fluctuations is seen in cryptocurrency. When the stable coins turn Red, holder's will rush to sale of and buy bitcoin or Altcoins, same way when Bitcoin and Altcoins begins to bear, people dump and rush to convert their funds to stable coin thereby the fluctuations you talk about.

I think it all depends on the price of bitcoin and other altcoins. red means that many sell stablecoin to buy the altcoin. but Stablecoin has its own uniqueness where the value is fixed and up or down no more than 1% of USD

That is the law of supply and demand. If the stablecoin goes down, the reason is that investors sold the stablecoin to move to altcoin to make a profit from it. But when altcoin collapses, every investor moves from altcoin to stablecoins and makes stablecoins turn green like you said.

It doesn't matter whether they're green or not because their movement isn't even felt by the market. Why? because they are stable coins. I don't see anything that we have to be curious of it because they're all stable coins. Sometimes they are proportional to the market and sometimes inversed.
That is the reason why you see them green and the other altcoins are not.

The change in stable coin are negligible, i.e. they are stable. The minute change are due to excessive buying or selling pressure.
When price of crypto decreases, traders convert their crypto to stable coin to preserve their value and vice versa when they increases. So they have a reciprocal relation.

It goes same way once in a while but most time correlation happens and that's how it's supposed to be, stable coins works perfectly right, I've even seen few stable coins like DAI going red while USDT stays green but it doesn't matter🤷, they serve users right

only a little difference in price it is not really affected . The reasons  why it's happen is simple traders always use stable coins every time they get profit or before they will lose in fiat value . That's why its move always in different sides.

Sample is when there are green market in Altcoins many traders will secured their profit  and convert in USDT that's why its red because many people converted their currency to stable coins .

Sometimes it goes the same way as those altcoins do, if I'm about to give vague answer, it's just a mere coincidence that you found it that way. However, it's just simply demand and supply doing its action. for all I know if bitcoin is being dumped that means people are selling off or in other words buying these stablecoin or the other way around, that clearly explain your question.

The opposite happens due to human needs. because when the coins grow, the holders of the stablecoins will sell it quickly and buy the coins. it is also one of the fomo effects and investors will have to quickly seize the opportunity to make a profitable trade. and when alts and btc are sold off, traders will sell off and fiat users will take advantage of the opportunity to buy more stablecoins and buy alts when they are cheap.

This is right. Think its just a matter of demand and supply. Thats normal to see when the market for crytocurrency the none stable coin goes up the stable coin will react opposite cause everyone buying crypto and demand for stablecoin gets lowered. It same when the vice versa happened. It's really just a simple understanding about the exchange of two factors.

That means when stable coin gets red pattern and so many stable coin holders sold their stable coin for altcoin or bitcoin and otherwise people will try to buy bitcoin and sell their altcoin when the bearish trend for altcoin is happening and this trend will always like this forever. It's easy to understand about the correlation between both

We all know stable coins/tokens like USDT, TUSD, etc which have always stable on one dollar or nearby of its value. But one of the things we always saw in stable coins/tokens is that their price graph chart is always opposite to all altcoins running in the market. I mean to say when all coins/tokens going up/green then these stable coins/tokens are in red/down position and when the market goes down/red these stable coins/tokens are in green/up positions. Can anyone explain why is this happen?