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Dips and Declines in Key Market Price / Ref Price vs. Key Price


Shining

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Hi,

 

I dont know much about the tf2 economy yet, but i would like to learn more.

 

Over the past few days, key market price has declined rapidly by almost 30c. Looking at the price history, I see that it does this periodically. Why do these random fluctuations occur?

 

Also, should we be expecting a gradual decline in the real world value of our backpacks? or just dips?

 

A week or two ago, ref price dropped by 1c. Since bp.tf calculates the value of a backpack based on ref price, backpack value also dropped. However, I feel this is quite superficial. If i can still sell my keys for the same price as before, then the real world value of my bp hasn't dropped. Is this true, or will key price catch up and fall along with ref price? Are we facing a sudden decline in key price in the near or distant future of tf2?

 

Long lectures are welcome

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For one, the price drop in keys on the community market at the moment is due to the summer sale. People want fast money to buy games so they lower prices on a ton of things, not just keys.

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One thing that's like essential in trading is knowing that the SCM and the backpack.tf prices are totally unrelated. What one sells for here has next to no relationship with that prices are on here. Backpack.tf uses an inefficient user pricing system for item prices which seems to set a price in stone for buyers to refer to. In reality people only do this for the fake ranks and imaginary website points. The real classifieds listings are based on what users want to sell their items for based on what people are willing to buy them for. Unfortunately, some of those listings are skewed by the backpack.tf pricing system. 

As for the SCM, youre seeing large dips right now because the demand for Steam funds is driving the supply of keys on the SCM up. As the supply of keys rises theyre going to continue to sell for less and less because all people are going to want is a certain about of Steam Funds to buy games with. It'll continue until it finds a resting point where the key sellers dont want to sell for much lower, which Ive seen hit as low as like $2 unless Im wrong. 

If youre trading with keys and looking to increase your personal supply, find which one works best for you. Sometimes it's cheaper to buy from the SCM than the classifieds and other times it's visa versa. Right now, the SCM looks like the way to go since it's getting driven so low, but wait a week or so for when those keys become tradeable in a user's backpack and the classified's supply will go up just as much which may possibly drive the price per refined down. A classified's drop was expected though because keys seem to have found an imaginary roof price where they max out at about 20 ref, at which point many buyers decide to stop buying until the price drops again. 

Any questions just ask. Im usually down to discuss economic stuff with people. 

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alright, interesting. Do you have any ideas as to why bp.tf chooses to calculate bp value based on ref price and not key price? Seems a lot more reasonable to me to base it off of key price which is by far more commonly sold for real money as far as i know. bp.tf gives one a valuation in a real world currency so why not base it off of the thing sold for real world money.

 

Also ref price seems to have been on a pretty solid decline for a while now, although it has leveled out a bit recently. Why is that? And what does it mean? 

 

I need help

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Refined is a better choice as it's more stable than keys as it's not as affected by the seasonal sales and various hypes.

 

As for refined's overall decline, it's because there is very low demand for the metal and more is entering the economy than is leaving it. Keys leave the market as people want to unbox, whereas with refined, there's so little to craft with it, especially as people prefer to use hats rather than metal to craft hats. However, there is still some demand for it, which is why the price has leveled off where it has.

For refined to increase in value, Valve needs to make a demand for it via an attractive sink. They've done it in the past with Chemistry sets, Bread Boxes, and most recently Strange Transfer tools, but they seem reluctant to add a sink that the f2p community can make use of.

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alright, interesting. Do you have any ideas as to why bp.tf chooses to calculate bp value based on ref price and not key price? Seems a lot more reasonable to me to base it off of key price which is by far more commonly sold for real money as far as i know. bp.tf gives one a valuation in a real world currency so why not base it off of the thing sold for real world money.

 

Also ref price seems to have been on a pretty solid decline for a while now, although it has leveled out a bit recently. Why is that? And what does it mean? 

 

I need help

 

Prices on backpack will be inaccurate no matter what you base them on. If you base everything around keys being $1.85, then all the item prices below 1 key will be inaccurate. If you base everything on refined being $.105, then everything a key or higher is inaccurate. If you use both, then you get weird situations where items worth less than a key can be worth more than a key.

 

The way to fix it isn't to change the system, it's to have refined and keys be equal in value, where "refined price X number of refined in a key = key price". Problem is refined is a pretty tiny market and rarely gets updated. There's also the fact that "refined price X number of refined in a key = key price" isn't required to be true.

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alright, interesting. Do you have any ideas as to why bp.tf chooses to calculate bp value based on ref price and not key price? Seems a lot more reasonable to me to base it off of key price which is by far more commonly sold for real money as far as i know. bp.tf gives one a valuation in a real world currency so why not base it off of the thing sold for real world money.

 

Also ref price seems to have been on a pretty solid decline for a while now, although it has leveled out a bit recently. Why is that? And what does it mean? 

 

I need help

Pretty much what Scott said. Ref prices are more stable since they only sell within the TF2 markets, not on the open SCM like keys do. People seem to compete more on key prices than ref prices too, since ref can usually be sold up into key prices for an easier cash conversion. But looking at Outpost listings alone youll see key prices within 20 cents of each other, but most ref prices will ball around the same price ranges no matter who sells it. 

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