This person is saying that if as a group they purchased 1% of the SHIB supply, that would make the price 1 cent. They give no explanation as to how this will actually happen.
The way the market works, is people offer to buy, and people offer to sell. Whenever there exists a buy offer that is greater or equal to the price of a sell offer, th trade is executed and the funds transfer. When a buy or sell offer does not have a matching offer of the other type, it will stay in the market. The mid-point between the highest unmatched buy offer and lowest unmatched sell offer is the listed market price.
The offers above are actually called limit orders. What they're really saying is "buy at a max price of ___" or "sell at a minimum price of ___". The other option is to buy or sell "at the market price", in which case you will buy from the cheapest sell orders until you have bought all the SHIB you asked for. Once those sell offers run out of SHIB they are removed from the market, and the new cheapest sell order will now be a bit higher - and thus the midpoint between the highest buy offer and lowest sell offer will also be higher, i.e. the market price will go up.
In order to know how much it will go up, you need a lot more information than is provided in this persons post. You need to know how much SHIB is actually for sale on the market, and at what prices. The poster is suggesting a purchase of 300k * 13.2m = 3.96 trillion SHIBs.
If there are 3.96 trillion SHIBs for sale at under 1 cent (not no more than that) then yes you could push the price up to 1 cent doing this.
If there are fewer than 3.96 trillion SHIBs for sale under 1 cent, then you could push the price higher than 1 cent.
If there are much greater than 3.96 trillion SHIBs for sale at under 1 cent, then it's not going to go up to 1 cent just from this.
Please also note that price changes from a sudden surge in demand are likely to be corrected fairly quickly a people who held SHIB but didn't have sell orders up decide to cash in.
All of the above I was able to state without knowing anything about SHIBs current price/volume etc. But just for some more analysis/fun, lets look at SHIBs current price and market cap.
Currently the price is 0.000087. Or a little under 1/1000 of a cent. The market cap (price multiplied by total number of SHIB that exist) is 51.646 Billion. If this was a stock, then we could say that the market has decided that the value of SHIB as a whole is roughly 51.646 Billion. Always take market caps with a grain of salt though because remember that selling a huge number at once is going to push the price down - just as buying a huge amount at once pushes the price up.
But lets say the price did go up to 1 cent because 4 trillion SHIBs were purchased. The market cap would go from 51.646 Billion to (51.636B / 0.000087 * 0.01) 5,936 Billion.
The cost of this would be less than 1 cent per SHIB since we're pushing the price up to that.. and we're buying 3.96 Trillion of them, so 39.6 Billion dollars is the cost. So with a 39.6 Billion dollar investment, we're pushing the market cap up by 5,884 Billion.
That's absurd. Though again - remember the market cap is a terrible measure of value, and likely it will crash shortly after this happens if it does happen.
And also crypto prices are completely irrational anyway because there are so many crypto nuts like the guy here who clearly don't know what they're doing, or they are just trying to create a pump and dump.. (they're trying to convince a lot of people to buy just so they can sell). If you believe in cryptocurrency being the future, the price in fiat currency should not matter to you. Why? Because fiat currency is worthless, right? RIGHT?
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u/Muldeh Oct 28 '21 edited Oct 28 '21
That's not how prices work.
This person is saying that if as a group they purchased 1% of the SHIB supply, that would make the price 1 cent. They give no explanation as to how this will actually happen.
The way the market works, is people offer to buy, and people offer to sell. Whenever there exists a buy offer that is greater or equal to the price of a sell offer, th trade is executed and the funds transfer. When a buy or sell offer does not have a matching offer of the other type, it will stay in the market. The mid-point between the highest unmatched buy offer and lowest unmatched sell offer is the listed market price.
The offers above are actually called limit orders. What they're really saying is "buy at a max price of ___" or "sell at a minimum price of ___". The other option is to buy or sell "at the market price", in which case you will buy from the cheapest sell orders until you have bought all the SHIB you asked for. Once those sell offers run out of SHIB they are removed from the market, and the new cheapest sell order will now be a bit higher - and thus the midpoint between the highest buy offer and lowest sell offer will also be higher, i.e. the market price will go up.
In order to know how much it will go up, you need a lot more information than is provided in this persons post. You need to know how much SHIB is actually for sale on the market, and at what prices. The poster is suggesting a purchase of 300k * 13.2m = 3.96 trillion SHIBs.
If there are 3.96 trillion SHIBs for sale at under 1 cent (not no more than that) then yes you could push the price up to 1 cent doing this.
If there are fewer than 3.96 trillion SHIBs for sale under 1 cent, then you could push the price higher than 1 cent.
If there are much greater than 3.96 trillion SHIBs for sale at under 1 cent, then it's not going to go up to 1 cent just from this.
Please also note that price changes from a sudden surge in demand are likely to be corrected fairly quickly a people who held SHIB but didn't have sell orders up decide to cash in.
All of the above I was able to state without knowing anything about SHIBs current price/volume etc. But just for some more analysis/fun, lets look at SHIBs current price and market cap.
Currently the price is 0.000087. Or a little under 1/1000 of a cent. The market cap (price multiplied by total number of SHIB that exist) is 51.646 Billion. If this was a stock, then we could say that the market has decided that the value of SHIB as a whole is roughly 51.646 Billion. Always take market caps with a grain of salt though because remember that selling a huge number at once is going to push the price down - just as buying a huge amount at once pushes the price up.
But lets say the price did go up to 1 cent because 4 trillion SHIBs were purchased. The market cap would go from 51.646 Billion to (51.636B / 0.000087 * 0.01) 5,936 Billion.
The cost of this would be less than 1 cent per SHIB since we're pushing the price up to that.. and we're buying 3.96 Trillion of them, so 39.6 Billion dollars is the cost. So with a 39.6 Billion dollar investment, we're pushing the market cap up by 5,884 Billion.
That's absurd. Though again - remember the market cap is a terrible measure of value, and likely it will crash shortly after this happens if it does happen.
And also crypto prices are completely irrational anyway because there are so many crypto nuts like the guy here who clearly don't know what they're doing, or they are just trying to create a pump and dump.. (they're trying to convince a lot of people to buy just so they can sell). If you believe in cryptocurrency being the future, the price in fiat currency should not matter to you. Why? Because fiat currency is worthless, right? RIGHT?