How do you put valuation into something?
I made a post on another thread before regarding the fact that in small markets, like in most of the altcoin space there are and always be people controlling prices, pumping and dumping, etc... Its somehow due to the nature of some markets which still are relatively small and therefore subject to this kind of behaviors, although we also know that in a big economy banks and big institutions are also market movers but on another scale... Anyway, the point is that someone posted yesterday a comment on another instance about altcoin price movements and coin control which I found indeed quite interesting and enlightening and wanted to share it here. Of course couldn't avoid making the connection instantly! It seems it is something quite common in this new universe, and perhaps we just have to get use to this, and better move on. However being clear about this as a fact... So, how do you put value into something?
"There's a dark underbelly to most alt coin price movements, perhaps all. They are all run by whales. I think of alt coin markets as whale farms. It's a business, if you can get control of a coin, whether it be buying the ICO at large quantities or other means, and if you have enough BTC backing, you can move the price up and down at will, each wave you're farming the weak hands like a tidal power plant. MAID and DASH is no different. If I was to take a stab, I'd say around ~$1.5b marketcap is where this stops. Bitcoin Uncensored did an interview with a BTC loan shark guy that controlled BTC price back in around 2012 when it was small. It really does screw with our natural notion that we can look at fundamentals of a project and say this is the fair market price. And even if there weren't whales, and markets were rational, bear in mind we already have an accepted way to value these kinds of projects... It's in the startup world where early stage investors just say "this shit is so speculative, we don't know what it's worth, just give me a discount on what the value will be if you get to a point of traction and get a VC valuation". In other words they put off valuation until utility is achieved, and there's a real growth curve, something real to do a valuation."
@vExact I agree all money markets are manipulated to some degree, as well as commodities, look at oil for example, to keep the price high OPEC cuts barrel production, to make it cheap, they drill out more, ..same with gold..and metals..Crypto is no different, and the smaller the market cap of the coin the bigger the whalish activity and manipulation..All one whale needs to do single handedly is to put whpping buy and sell walls and literally move the price to where he wants it to go..and of course you have the pump and dump groups lol.
@vExact value for something is always based on how desperatly needed or wanted it is. it were time when you could use salt or spices to pay for things since it was needed and thus got value :) Paper money is the same they have value only because we assign it to them (the association with gold or silver is long gone)
Do not be deceived.
I ask you a simple question.
Which is more likely to have raised the price of the burst because another forum appeared or because someone who has millions of burst has decided to speculate with them ???
I have no doubt that with crypto will happen the same as in the dot com bubble. You see people getting tons of money for only a white paper and zero development. There is like a gold rush in reality :) In the startup world entrepreneurs have to at least deliver something at the beginning in most of the cases, and receive the necessary funding to work upon the deadlines and investments rounds... Venture capitalist do assign a value given the potential something has, even when they do not know exactly where it could lead. But the value most of the times is based on utility as it should be indeed, and integration and synergies with other partners, etc... Now with whales controlling moves, etc the real utility value gets somehow behind and sometimes ignored, the individual desire for profit sometimes is not the best that can happen to a market, but this the way things work and not everything is perfect...