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102 sats \ 3 replies \ @Undisciplined 5h \ parent \ on: Fama: Bitcoin is Dead (Promarket/Capitalisn't) econ
Yes, it does lower the bitcoin price, other things equal.
No, they are taking bitcoin at whatever exchange rate they can get it, which will be higher prices. They either have to outbid the other market participants or pay enough to entice new sellers to make exchanges.
What matters here are the elasticities of the two currencies. The coin that prevails will be the one who's price is less sensitive to shifts in supply/demand.
If the best offer Darth can find requires giving up a greater quantity of Forkcoin than he gets back in bitcoin, that means bitcoin is winning the dumping contest.
No, they are taking bitcoin at whatever exchange rate they can get it, which will be higher prices.
Isn't this also what Darth is doing?
They either have to outbid the other market participants or pay enough to entice new sellers to make exchanges.
Did Darth outbid someone or pay enough to entice new sellers to make exchanges when he offered his fork coins for sale (tried to buy bitcoin with them)?
My understanding of the Darth analogy here is that yes, he did (he enticed new sellers of btc to enter the market). And our outcome, surprisingly, is that because of this the price of forkcoin went down.
You suggest that Darth's trade is an increase in supply of forkcoin even though we are explicitly saying he is enticing new sellers of bitcoin to enter the market.
If Darth's willingness to sell forkcoin is an increase in supply, so is his trading partner's willingness to sell bitcoin.
My contention is that this all ends up being contradicting itself because the reality of markets is that every trade is a balancing of the supply and demand of the things traded. And so a trade cannot change the price of either item in the trade.
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Isn't this also what Darth is doing?
Yes. I was saying no to the direction you thought the price would move.
Did Darth outbid someone or pay enough to entice new sellers to make exchanges when he offered his fork coins for sale (tried to buy bitcoin with them)?
Yes, he did. I described that in my little story.
You're getting hung up on something about Darth's counterparty and I'm not totally sure why. The person Darth buys from doesn't change his ask, so it isn't new demand. All that happens is Darth's increased supply of Forkcoin matches Darth's bid with that existing ask.
In my example, the only thing changing is that Darth is more willing to part with the Forkcoin he has than their previous owner was. Nobody else has any change of preference.
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Yeah, I'm still have trouble with drawing a line around Dartg's side of the trade and acting like we don't have to account for the change in demand that occurred when his counterparty created his ask.
Either we must account for all possible demand levels at all times or we only may account for them at the time they are realized in a trade. We can't choose to account for changes in demand at one time and not another because both levels of demand are expressed in the same trade.
the only thing changing is that Darth is more willing to part with the Forkcoin he has than their previous owner was.
I disagree here. My read is that Darth's trading partner also had to be more willing to part with something than he previously was.
This is more or less where we were about ten iterations above. I will spend more time thinking about your answer there (#876535) and see if I cannot better explain my disagreement.
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