Consider the following thought experiment. A restaurant selling meals for $10 will happily accept payment in the form of one Hamilton bill ($10) or two Lincoln bills ($5). That is, the nominal exchange rate between Hamilton and Lincoln bills is 2:1. Now, suppose that the supply of Lincoln bills is increased but the supply of Hamilton bills remains the same. The exchange rate remains unaffected [
] That is, the increase in the supply of Lincoln bills has led to a decline in the purchasing power of both Lincoln bills and Hamilton bills, even though the supply of Hamilton bills has remained fixed. Might an expansion in the supply of Altcoin have a similar depressing effect on the price of Bitcoin?
I do not agree with this postulation, it assumed that bitcoin and the growing number of altcoin all have the same utility and cabbe used interchangeable. This is not the reality, the vast majority of altcoins and barely accepted by the cryptocurrency community, and the top 20 altcoins hold a very large percentage of the entire cryptocurrency market cap.