Reminder: NMC prices depend on BTC prices

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Anth0n
Posts: 15
Joined: Tue May 31, 2011 12:56 am

Reminder: NMC prices depend on BTC prices

Post by Anth0n »

In my opinion, looking at the difficulty ratio is not a good indicator of what price will be. When BTC prices go down, NMC prices should go up, which would then subsequently affect difficulty. Also, a simple difficulty ratio fails to take into account that supply of NMC is much less than the supply of BTC. Since BTC prices are falling, I've bought a whole bunch of NMC expecting them to rise. So when BTC starts rising again, that might be a good time to consider selling some. Thoughts?

JohnDoe
Posts: 94
Joined: Sat May 28, 2011 8:46 pm
os: linux

Re: Reminder: NMC prices depend on BTC prices

Post by JohnDoe »

Anth0n wrote:Since BTC prices are falling, I've bought a whole bunch of NMC expecting them to rise. So when BTC starts rising again, that might be a good time to consider selling some. Thoughts?
Looks like NMC going up when BTC goes down is holding true for now. Not so sure about the second part though. NMC are scarcer and arguably a better currency so some people may be jumping ship to NMC for good.

Anth0n
Posts: 15
Joined: Tue May 31, 2011 12:56 am

Re: Reminder: NMC prices depend on BTC prices

Post by Anth0n »

JohnDoe wrote:
Anth0n wrote:Since BTC prices are falling, I've bought a whole bunch of NMC expecting them to rise. So when BTC starts rising again, that might be a good time to consider selling some. Thoughts?
Looks like NMC going up when BTC goes down is holding true for now. Not so sure about the second part though. NMC are scarcer and arguably a better currency so some people may be jumping ship to NMC for good.
Namecoins are absolutely a better currency in theory, since they possess a fundamental usage that help to make them valuable. But lack of publicity makes it risky to trade, however they can potentially be extremely profitable. The risk is why it is strategically advantageous to sell some NMC when BTC price starts to rise, since NMC prices should fall. I would rather advocate a sound trading strategy than sound like a pumper.

smoothie
Posts: 34
Joined: Sun Jul 10, 2011 4:45 am
os: linux

Re: Reminder: NMC prices depend on BTC prices

Post by smoothie »

Anth0n wrote:
JohnDoe wrote:
Anth0n wrote:Since BTC prices are falling, I've bought a whole bunch of NMC expecting them to rise. So when BTC starts rising again, that might be a good time to consider selling some. Thoughts?
Looks like NMC going up when BTC goes down is holding true for now. Not so sure about the second part though. NMC are scarcer and arguably a better currency so some people may be jumping ship to NMC for good.
Namecoins are absolutely a better currency in theory, since they possess a fundamental usage that help to make them valuable. But lack of publicity makes it risky to trade, however they can potentially be extremely profitable. The risk is why it is strategically advantageous to sell some NMC when BTC price starts to rise, since NMC prices should fall. I would rather advocate a sound trading strategy than sound like a pumper.
Maybe this is just a preferential strategy but why would you sell when you're expecting the price to go down? Wouldn't you want to buy into weakness and sell into strength (i.e. buy low, sell high)? Your strategy seems contrarian in that you are selling when the price goes down (sell low) and buy when the price goes up (buy high).

It may just be me but what I expect to happen in the difficulty adjustment at block 16128 is an initial sell-off to the difficulty equilibrium. Then if no one wants to buy namecoins at those prices or sell them then the market stays at those rates and miner leave to go back to BTC. Or after the sell off because there is no point in profiting the sellers hold until the price goes back to where it was or even higher. Keep in mind the ration after a 4 times increase of 22300 will be around 90,000 and given the difficulty ratio of NMC to BTC that puts the ratio to mine them at 0.0556 or so. So you can count on the mining ratio to increase. If the market value on the exchange does not go up with the difficulty you will see a huge buying of NMC up until 0.0556 and past it a bit because it would be cheaper to buy them than to mine them at that point.

But anyways I expect volatility nontheless given that 2016 blocks = 100800 NMC will be added to the total NMC in a few days time which is more than 10% of the current total NMC out there.

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