If you have an idea how Forex exchange works then you will have an easy time understanding things. Bitcoin is like the US dollar in forex exchange. Bitcoin is the central currency and has served as a medium of exchange between cryptocurrencies. This implies that in order for us to compute the value of an altcoin we must consider this formula:
- The value of bitcoin in dollar
- The price of an altcoin in bitcoin form
- Multiply the value of bitcoin (1) to the corresponding bitcoin equivalent or value of the altcoin (2) then you have the real value of an altcoin.
This implies that the value of an altcoin is dependent on the value of bitcoin in the market.