I think BTC is correcting to around 8k, jmho.
I'm looking to buy some Altcoins but I have an obstacle keeping me from getting into this market. As a newbie, I'm having a hard time getting my head around the USD-BTC-Satoshi relationship. I've gotten mix responses to this question, but from what I've researched this is what I've concluded.
If one BTC contains 100 million Satoshis, and the value of a Satoshi is based on the current value of one BTC. And all coins are based on the Satoshi value
Then is this scenario valid?
Let's say that BTC is at 10,000 USD and you buy $1,000 USD worth of BTC. You put that $1,000 on a coin and it shoots up to 100% gain ($2000 USD). But BTC drops to $5000. USD
The way I understand it is if I convert my BTC back to USD, in this scenario I will end up with my original $1,000 with no gains.
Any help is appreciated. Thanx
That scenario is incorrect. Let's say you buy 1 unit of an altcoin for 10k Satoshi. There are two ways altcoins can change in price:
The value of a Satoshi goes up. For example, let's say 10k Satoshi = $1 when you initially invest. That put Bitcoin at $10k (note that Satoshis are just a unit of Bitcoin like pennies are a unit of a dollar, meaning they will always be exactly 1/100,000,000th of a Bitcoin). Let's say Bitcoin doubles to $20k and your altcoin is still worth 10k Satoshi. Now your altcoin is worth $2. If you cash out to Bitcoin then sell Bitcoin, you'll get $2.
The number of Satoshi that your altcoin is worth increases. Let's say that your altcoin increases to 20k Satoshi, but Bitcoin stays at $10k. Your altcoin is now worth $2. If you cash out to Bitcoin then sell the Bitcoin for USD, that's what you'll get.
In reality, a combination of these two occur which affect price.