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General Discussion / Pegging & supply, help me understand
« on: October 14, 2014, 03:39:27 pm »
I am trying to understand the implications of market pegging, price, supply and their interactions. I am probably missing something or making assumption that aren't valid so please help me.
The situation troubling me is that if the peg for BitUSD holds at a 1:1 ratio and liquidity and access increase to the point where the BitUSD and USD become almost interchangeable. This situation would seem to be akin to increasing the supply of USD and hence should have the effect of inflating the asset BTSX pegs to. At 60mil market cap, the effect now is minuscule but you can take this line of thinking as far as you want with competing coins etc. and the effect on finite assets (BTC, Gold..) could be substantial.
What am I missing?
Thanks
The situation troubling me is that if the peg for BitUSD holds at a 1:1 ratio and liquidity and access increase to the point where the BitUSD and USD become almost interchangeable. This situation would seem to be akin to increasing the supply of USD and hence should have the effect of inflating the asset BTSX pegs to. At 60mil market cap, the effect now is minuscule but you can take this line of thinking as far as you want with competing coins etc. and the effect on finite assets (BTC, Gold..) could be substantial.
What am I missing?
Thanks
