For traders used to traditional FIAT currency markets, the exchange rates between cryptos and U$ and Euro can seem a bit daunting. And with good reason.
There are currently thousands of cryptocurrencies, each of them having a 100% free floating exchange rate against any other crypto. Which means there isn’t a fixed reference like there would be with major FIAT currencies like Euros and US Dollars.
For decades, we’ve been used to comparing currencies to the US Dollar. And we do it unconsciously, because it’s the Dollar standard. But this not the case with cryptos. Thus, crypto market movements can seem unintuitive even to experienced stock, option and forex traders.
While, at this moment, Bitcoin displays a small loss against USD, most other altcoins are gaining against the BTC. So what does this mean, exactly?
In macro terms, it means Bitcoin is getting traded in favor of other altcoins, but it is NOT being traded for FIAT money.
That is, investors are moving to other cryptos and are not cashing into FIAT after their recent profits. This movement shows that the investment community is confident in cryptos and is not returning the money back into traditional currencies, even after extremely large percentage gains against FIAT currencies.
We’ve got interesting times ahead.