Quote Originally Posted by seobook View Post

  • When Bitcoin Cash was added to Coinbase it jumped & capital that was reallocated into it caused Bitcoin to slide.
  • One of the reasons Coinbase is in no rush to add any other cryptos is if Bitcoin tanks it kills the narrative for most of the other coins as well. If narrative of Bitcoin becomes impaired over the longer term then sales pitch of "next Bitcoin" is much less sexy.
I think you have the causal relationship in reverse order. Yes, Bitcoin Cash (BCH) jumped when it was added to Coinbase. This is true for any cryptocurrency when it is added to an exchange. As an example, Janus (JNS) recently jumped ~10,000% overnight while Bitcoin (BTC) and the rest of the market was down because it was added on some exchange. Did JNS cause BTC to fall? No, that would be absurd. Neither did BCH cause BTC to fall. BTC is still the driver. A more fundamental insight is that BTC has been losing market share, and lots of it, because it has exorbitant fees due to the 1MB blocksize limit. It is truly staggering how much market share BTC has lost in the past 12 months. It dominated for nearly 8 years with ~90%+ market share until it started to slide last March. As of today, it has 33% market share. In the long-term, its market share will dwindle down to zero.

As for the reason why BCH was listed on Coinbase in the first place: Roger Ver (the CEO of bitcoin.com and major proponent of BCH) is a childhood friend with Brian Armstrong (the CEO of Coinbase). They both recognize that BTC is practically unusable at this point because of its exorbitant fees.

Adding friction / cost / uncertainty to financial transactions may increase the profit margins for remaining exchanges, but it should be a net negative for prices of the asset class overall as people feel they will have to pay a bigger fee or face more uncertainty to enter or exit the position.
If buying/selling gold were made illegal in the state of Washington, I believe the price of gold would go up in the state of Washington. I believe the price of BTC (and therefore the entire market since it is still a driver) will fall for the next few months, perhaps even longer, because I have seen these episodes of exuberance in BTC before: there is a run up, the price goes parabolic, early birds take profits, the price crashes, and then the price bleeds for a while.

Compare currencies to other financial markets or asset classes.


  • If homes saw dramatically higher interest rates for any loan terms beyond 5-years, would home prices go higher or lower?
The answer is lower, but I think this has more to do with the supply of money and credit. When credit is cheap, asset prices tend to go up and vice-versa.

As far as virtual assets go, comparing crytpocurrencies to domain names isn't all that far fetched.
I don't think you need to go as far as domain names specifically. A name in and of itself is important. For example, I have a friend who sold an instagram username that he registered early on for over $10,000 a few years ago. Being a fan of Mayweather, I registered ~TBE on ripple (XRP) in 2013 as my address because their addresses have usernames instead of just randomly generated letters (or "keys"). I doubt you can get a three character address now that it is a mature cryptocurrency.

Things I see coming in the pipeline: Decentralized exchanges which cannot be shut down (sort of like torrents), built-in exchanges for some cryptocurrencies, and a whole new debate unfolding. Simillar to the scalability debate which happened last year which made scalable cryptocurrencies like XRP explode ~50,000%, the upcoming debate will make certain cryptocurrencies explode as the narrative takes hold. In the meantime, I think the BTC price will bleed out (and therefore the rest of the market) until we find a new floor.