(ETH) started to diverge from () around the end of February, 2019. This led to a state of confusion in the market as investors were confused whether to follow or /USD. This was a strong indicator of the disconnect between () maximalists and believers. Most () maximalists believe that all apart from () are scams. Well, if you think about them as then yeah, they are a scam. Why? Because () was created to solve the double spending problem and to create a digital currency that is protected from inflation. So, if projects like (ETH) or (LTC) have their own that can be used to make purchases, then what is the difference between this and fiat? Today it is (LTC), (ETH) and Cash (BCH) but tomorrow it will be some other that is hyped up like Zilliqa (ZIL), () or (TRX).
Now, this is a very valid argument but what () maximalists fail to see is that those projects are not necessarily () competitors although some of them like (XRP) claim to be. This disconnect between () and believers runs very deep. It would thus not be surprising to see () break away from the market sometime in the future. This would formalize the disconnect between the two and finally assign to them the different markets that they need. () and (ETH) were never meant to be in the same market. Both of them may use technology but they are not the same. () is more like digital gold whereas (ETH) is more like a stock.
The divergence that we saw in () and (ETH) is not easy to ignore. Around Feb 24, 2019 we saw rise in an ascending channel whereas ETH/USD declined during the same time. Between March 04 and March 09 people started talking about it and the divergence eventually ended and both are now on the same page. () and (ETH) might be the same way for now but we do not expect this to last for long especially when the market evolves. We are still too early in this market. Whenever () and (ETH) goes up, we see even the most useless of rise in price.
If we think about this, the same cannot be expected in the stock market. When the S&P 500 rises, we do not expect every small cap company to start rising. There are some that profit off the rise if they are already doing good but those that are not doing well do not rise. In other words, all stocks are valued on their own merits and demerits instead of the movements of the bigger market. This way, we could see (ETH) move on its own when the market matures.
Published at Thu, 14 Mar 2019 23:09:42 +0000
