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0 sats \ 9 replies \ @000w2 8 Jan \ parent \ on: How to run an economic node bitcoin
Prices are determined by supply and demand. So if there is more supply than there otherwise would have been it does affect price - to what extent and for how long is up for debate.
Supply in this context = a holders' decision to trade one coin for another.
But there is another person who is on the other end of the trade.
If I "dump" fork coin to get btc, why isn't it just as true that the other side of the trade is dumping btc yo get fork coin?
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In the case of a trader who is willing to sell their coins for less than others are willing to pay, what stops a nonideological trader from buying such cheap coins and reselling those coins at market rate?
Obviously, the nonideological trader can continue to do this until the market refuses to buy them or the dumper stops dumping.
As long as there are buyers willing to pay more for the coins than the dumper is asking, the dumper is simply transferring value to an arbitrager. And the price will remain at the highest level people are willing to pay.
Example:
Someone has a limit order to buy 1 btc at $80k. Along comes a whale who wants to "dump" on the market and crash the price. They fill that limit order, offering the buyer some cheap sats.
The buyer could just ride off into the sunset, happy as a clam, or they could say: "Wow, look at this: I can sell this 1btc for $95k (the price that people other than the dumpers are willing to pay) and make a cool $15k!"
And further, if the whale is still dumping, the buyer can say, "Huh, if I do this again, I can buy $15k worth of bitcoin from this guy who is selling at $80k and go sell it for $18.75k! And I can keep doing this until the whale stops selling cheap sats!" ...OR until no one is willing to pay more for bitcoin than the whale is offering.
All the dumper achieves is subsidize the trader who is willing to trade at market rate. They aren't moving the price unless you assume no one would act on the arbitrage opportunity.
As long as there are people willing to trade $95k for bitcoin, the price will be at least $95k. If the price is lower, it means that no one demanded bitcoin enough to trade $85k for it.
Put differently: the only way "dumping" can lower a price is if no one is willing to pay more than the price at which the coin is being dumped. But then, that's not really dumping. That's just selling at the market rate.
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I can't really understand what you are trying to say.
The market price is the midway point between the lowest asking price and the highest bid price.
If you put in a sell order below market price, all that happens is that the bids get filled from highest to lowest until your order is fully filled.
It's not possible to sell at below market price in the market. You would have to do it as a private deal. i.e. you'd no longer be operating in the market.
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Put your low ask out there.
If it is lower than most other people are asking I can take you up on your low ask and immediately sell it to someone who is willing to pay more.
I can do this as long as you put low asks out there. (As long as you keep "dumping")
The midpoint doesn't move because for every coin that you choose to sell low, I buy it and offer it at market. All that happens is you transfer the difference to me, or anyone else willing to arbitrage.
Selling into limit orders only moves the market if no one is willing to buy higher than you are selling.
If you sell lower than others are willing to pay, anyone can buy from you and resell at the higher rate. Your dump just becomes a transfer of value to someone willing to do this.
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Ever heard of the water flow analogy?
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Only in the context of electricity.
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I fully agree.
I'm saying dumping can't lower price because as long as there is demand at a higher price, the market will respond to that higher price.
When it comes to price the coin you want is more important than the coin you have.
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