$ 29, Tetra 33; What is the reason for the difference between the price of Tetra and the dollar during the sharp fluctuations of Bitcoin? An expert’s answer

Yesterday, after the sharp fall in the price of Bitcoin and other digital currencies, the price of Tetra in the Rial markets and domestic exchange offices reached close to 33,000 Tomans, while at the same time, the dollar was priced at around 27,500 to 29,000 Tomans. Tomans was traded. A slight difference between the price of the tetra rial and the dollar is normal; But why is this difference so significant when prices fluctuate sharply in the digital currency market?

Exclusive Digital Currency – Yesterday, after the price of Bitcoin and other digital currencies fell sharply, the price of Tetra rose in the rial markets of domestic exchanges. In the Iranian market, Tetra is usually traded at a price higher than the dollar, and the slight difference between the two rates is nothing new. However, yesterday, while the paper dollar was traded in exchange offices around the country at a price of about 27,500 Tomans, the price of Tetra in the Rial market of domestic digital currency exchanges exceeded 32,000 Tomans, and even in some exchanges it was close to 33. Reached 1000 Tomans; That means more than 5,000 Tomans difference between the price of Tetra and the dollar.

In markets outside Iran, Tetra is usually traded at a price higher than the dollar. For example, if we look at the “Tetra / Dollar” market in the American section of Bainance Exchange, we see that Tetra is bought and sold for more than $ 1 most days of the year. Despite this similarity, there is a key difference between domestic and foreign markets.

As you can see from the picture above, if we leave aside the sudden price fluctuations that lasted less than a few minutes, the dollar price of Tetra in Bainance has never been more than $ 1,0082 over the past two years; At the highest level, Tetra is 0.82 percent more expensive than the dollar. However, a slight difference in the price of the tetra rial and the dollar in the domestic market seems quite natural.

Yesterday, however, after the price of bitcoin and digital currencies fell sharply, the price difference reached more than 15%, which is higher than usual.

Considering the differences between the Iranian market and other countries and the limitations faced by domestic exchange offices, it is necessary to examine the issue of the difference between the price of the Tetra Rial and the dollar with a special look at the Iranian digital currency market.

Iranian digital currency traders often face two key questions:

• First, why the difference between the rial value of the tetra and the dollar is greater than usual in foreign markets, and what is the reason that the rial price of the tetra is often higher than the dollar.
• The second question is why the value of Tetra Rials increases when the price of Bitcoin and digital currencies fluctuates sharply.

To answer these questions, we spoke with Kaveh Mushtaq, a researcher in digital currencies. You can read the details of this conversation below.

Why is Tetra usually more expensive than the dollar?

In an interview with Digital Currency, Kaveh Mushtaq, in response to the question why the price of Tetra is often higher than the dollar, pointed to the greater attractiveness of Tetra among traders and stated that this attractiveness has made Tetra a little more expensive than paper dollars. To include the costs of providing Tetra.

Mushtaq said:

There are three main reasons: First, digital money is much faster, and market influences and events happen faster. Second, Tetra is more attractive to many [از دلار] , Because they can easily use it to buy and sell and transfer money. Third, digital currencies are not criminalized in our country. For example, in our country, if someone has more than a dollar of paper money, it may be a crime; But this is not the case with Tetra.

Why do Tetra become more expensive when digital currency prices fluctuate sharply?

“Enthusiastic about the reasons for the increase in Tetra prices during the sharp fluctuations of digital currencies,” he said.

There is a bifurcation in the digital currency market. When the price of bitcoin goes down, some people get scared and start selling. These traders receive tetris in exchange for the bitcoins they have sold, and as a result, the demand for tetris increases and, as a rule, the price increases. On the other hand, some people who had control of the Tetra market before the fall of the market enter the market and buy bitcoins with them. This, in turn, reduces prices, and it remains to be seen which of the two branches is more effective.

Mushtaq added:

If traders assume that the price of digital currencies has fallen and continues to decline, sellers will increase and those who already have Tetr will be afraid to invest in the market, resulting in a decrease in Tetr supply. Finds. This gives the market control over the flow, which raises the price of Tetra. But if after the fall it is assumed that the price will not go lower than this, the new money [تتر] Enters and compensates. Thus, the price of Tetra will decrease and the market will be balanced.

Mushtaq continued:

On the other hand, when the price [بیت کوین و ارزهای دیجیتال] Going up, there is again this bifurcated flow, and traders’ perception of the market trend continuing after the climb can affect the price of Tetra.

Mushtaq says there is no direct link between Tetra and the dollar in Iran, and an institution does not provide paper dollars to traders in exchange for Tetra. He believes that this is why the dollar and tetra markets are separate and should be examined separately.

Mushtaq said:

More Tetris that [به‌صورت عمده] It enters Iran through China; This means that bitcoins mined in Iran enter the Chinese market and receive tetris in return. With the fall in the price of Bitcoin, the supply of Tetra to Iran will decrease and this will cause the price to increase somewhat. On the other hand, with the jump in the price of bitcoins, the supply of tetr will remain almost constant, because then all the bitcoins extracted will no longer be sold in exchange for tetr. As a result, the other side, which is working to increase the price of Tetra, has more control over the market.

Mushtaq believes that the discovery of Tetra prices does not take place in the rial markets and domestic digital currency exchanges, and that transactions outside the exchange markets and between Tetra whales are the main determinants of the price of this stable coin.

He said at the end:

In my opinion, it is not like you think that money changers decide to raise the price of Tetra. Of course, the money changers themselves, as market whales, play a role in the fluctuations of Tetra price, but their role is indirect and it is not the case that they directly affect the market and raise the price.