I was wondering why PIVX was crashing along with the BTC price rise.

So I just learned PIVX had a direct fiat pairing added (PIVX/CNY) back at April 20.
https://bitcointalk.org/index.php?topic=1262920.msg18663009#msg18663009

That was not a good development IMO... it opens up PIVX to fiat arbitrage.
Like if BTC rises in price, they can get PIVX by BTC->CNY->PIVX in their market,
and dump it on our BTC/PIVX market for more BTC than they started with.

No wonder we lost the amazing stability in price PIVX had.
Back at 50-70k, PIVX was like a rock, I couldn't get any decently sized (>1 btc) buy order filled.
No one would sell to me, always had to buy off the sell books.
Red candles were paper thin.

And now it seems weak hands just won't run out, red candles always have a decent length on them.
I was wondering why we couldn't shake them out, everyone should've been hoarding for MNs.
Now I know it's probably fiat arbitrage.

The thing about having a fiat pairing, it permanently changes a currency.
Instead of being pegged to the BTC price, it becomes pegged to the FIAT (USD) price.
Since people will always be running arbitrage using the fiat markets.

So if BTC does a moon run to $5000 or something ridiculous,
you could always ride that moon rocket in another coin that has no fiat paired market.
The BTC price of the coin would probably remain unchanged.

But a currency with a fiat pairing will most likely stay at the current dollar value instead due to arbitrage
(i.e. in terms of BTC price, it would be crashing)
With a fiat pairing, you lose the ability to rise ALONG with bitcoin, the coin instead starts moving in contrast with it.

e.g. look at ARK, which probably doesn't have fiat paired markets yet.
It's stable as a rock despite BTC price rising.

On the other hand, look at PIVX on the Bittrex charts.
The crash started HARD on April 20 (the day the fiat pair was added)
http://i.imgur.com/sn6rZiv.png

Well... it's there now. And adoption is always good in the long term.
I just wish it was a BTC/PIVX pairing instead of a fiat one.

randombitcoinnoob

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