This is a common mistake that purchasers of Bitcoin and other cryptocurrencies make. They exchange their hard earned money (Fiat) for Bitcoin. Which is good, start investing, start to change your life. They take in interest in one of the Altcoins. Ethereum, Neo, whatever takes their fancy. They then take that see that the price of their coin has gone up. Awesome, they’re making money. Then they swap it back to Bitcoin then back to Fiat and lo and behold, they’ve lost money.
There are three key points to look at here.
One, the price of Bitcoin at this stage dominates the market. At the time of writing it has 52.8% of the market share. A basic staple of the current shape of the market is that in order to purchase an altcoin, you normally need to purchase Bitcoin first. This transfer means that you want to look at the price difference between Bitcoin and the Altcoin you have purchased. It’s where you entered the market and the difference between these two prices is what matters.
Two, the price of Fiat doesn’t necessarily affect the coins. The price of a dollar has no bearing on Cryptocurrency, except in that it matters where and how much currency has been transferred into Crypto initially. Fluctuations in traditional currency markets would conceivably cause a crash, but this would have to be a worldwide market crash.
That’s the key point here, Crypto isn’t tied to anyone marketplace. QTUM is a great example. China shut down Crypto, ostensibly to create better legislation for it. QTUM went from being China’s Ethereum to Asia’s Ethereum without missing a beat. There is even speculation that they will launch a fully functioning node into space. What an accomplishment this would be, creating a full record of the QTUM Blockchain that’s untethered from any local laws. Essentially starting a new space race. Which would make it possible for it to be developed in trust with the global community.
Thirdly, The overall market cap of not only a specific coin but the entire market cap of every coin is a key metric to look at. The Market Cap defines the price of any given coin. It also adds up to the total value of the entire marketplace.
When massive dips in the total market cap are observed, these trickle down to individual coins, causing a reduction in the overall market cap. It’s just basic math.
The only way to invest wisely is to listen to the news, look at the charts and seek out expert advice. We can’t and won’t do it for you.
Knowledge is power, guard it well.