For this article we regard ALL prices in crypto-crypto units, and unless otherwise noted, denominated in units of BTC. Therefore bitcoin costs 1, LTC (today) costs ~.009 BTC/LTC, etc…
I have noticed there is a way to burn bitcoin in order to raise the price of an altcoin, assuming low volume, and assuming there is a secondary market, such as LTC, on which the coin is trading. I call it the pump machine. It goes as follows:
Method of spending BTC to temporarily pump the bitcoin price of a low volume coin, which will be denoted SHT:
1) Suppose you only have 1 BTC
2) Buy as much SHT as you can with 1 BTC
3) Go to the LTC/SHT market and sell all the SHT for LTC. Now you have a bunch of litecoins.
4) Go back to the BTC markets – this time, the BTC/LTC trading floor. Take the LTC and sell it for BTC. You’ll now have a bit less than 1 BTC (most likely).
5) Now that you hold BTC (perhaps a bit less than 1) go back and pump SHT! Buy .9887 BTC worth of SHT, rinse and repeat. If the markets are dull enough, you can make it seem, for a while, like more bitcoin than you could possibly spend on SHT is buying the SHT up. In the end you’ll pay for this deception, but in the short term, it’s a pump machine.
6) Continue the cycle. Watch your bitcoin stash go melt away slowly as you literally pay to pump the price. It’s a bit like a carnot engine.
Consider donating to keep altoidnerd.com ad free. 13xdMqkaVKkHKT3ZZx5ikAvQUEkzqpDkDb
Coming soon: the advantage of trading an alt which has reached price parity with LTC. Complete with math.
LTC – how low can it go? It might be time to take a shot with LTC for a potential bitcoin profit.
I have done this with LTC a few times – the best of which was last November. Priced in BTC, it is now near parity with DRK and below .01 … which isn’t far from the price I think I paid for a bunch of LTC right before the boom in November, when I started writing about trading in /r/cryptomarkets with “the golden rules for alt trading.”
One thing that makes LTC different from other scrypt alts is its very slow ditribution – it’s just as slow as bitcoin. To me, that makes it still attractive as a swing trade, because big investors are probably thinking about it. What do y’all think?
BTW, just looked. I decided to buy lots off LTC last year at .008, and it’s not far from this mark. I wrote the golden rules to this sub from a 5-star hotel (I don’t stay in those) thanks to that trade. Good times…