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About 40 Percent of Bitcoin Is Held By 1,000 Users. If a Few of Them Want To Sell, That Could Tank Values (bloomberg.com)
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency. From a report on Bloomberg: Holders of large amounts of bitcoin are often known as whales. And they're becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year. About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
You are heavily invested in this scam. Enough with the bitcoin stories.
Show of hands if you are tired of the bitcoin stories?
I read at +2. If your post doesn't reach that level I will not see or respond to it.
If they sell and people are buying, now that value is in the hands of more people, which is helpful for the long term outlook.
As the price goes up, there's always more pressure to sell for those who have excess. There's also the knowledge that the inflation rate drops constantly and wallets get lost, so it's not an unlimited supply.
I'm no whale but I've been buying small amounts since 2012 and my bitcoin net worth is greater than all my other assets + cash + stock, but I'm not selling.
Have held their value for THOUSANDS of years. Bitcoin, has been around a few years and is as VOLATILE as they come. Not to mention totally intangible. Anyone dumping REAL CASH into this BS that isn't one of those 1000 people... Is giving away all of their money to those 1000 people. Basically. Because WHEN it tanks, the little guy loses 100% of their investment while they try and scramble to sell. While the 1000 sell out using high powered brokerages during its fall, and keep up to 50%...
By a select few with large amounts who can manipulate things to cash out together at a certain point. This will leave everyone else holding the bag so to speak and the cycle will repeat as large groups left over try to recoup losses from the first group by doing the same thing.
You have to take into account that this isn't a unique situations. If billionaires start dumping all of their dollars they could tank the whole US economy. They don't do that because it would be massively against their own interests, just as it would be against the whale's own interest to tank Bitcoin, they are the folks who have the most to lose in destabilizing it, and are going to do everything they can to stop that from happening.
https://support.bitfinex.com/hc/en-us/articles/115004555165-The-basics-of-Margin-Trading-on-Bitfinex
https://www.investopedia.com/news/short-bitcoin/
https://www.bloomberg.com/news/articles/2017-11-27/calling-a-bitcoin-top-here-s-how-you-can-short-the-digital-coin
https://www.thestreet.com/story/14414500/1/what-to-know-shorting-bitcoin.html
https://coincentral.com/short-bitcoin/
https://99bitcoins.com/short-sell-bitcoin-make-money-on-bitcoin-price-drops-thourgh-bitcoin-short-sale/
https://themerkle.com/top-7-ways-to-short-bitcoin/
http://www.telegraph.co.uk/investing/gold/can-short-bitcoin/
Even for beginners !
...because that's exactly what Bitcoin is. A pyramid.
An investment, but worse than any stock, because it's an investment in nothing.
And yes, it's also a "cryptocurrency" -- congratulations. Blockchain!
Huh?
Somewhere in that mush is a comment.
I'm sure those exchanges and institutional investors are going to dump any second now.
Wow, the big bankster trolls are out in force today...
Lots of things have intangible value. Tangible simply means it is something you can hold in your hand. All debt instruments are completely intangible - stocks, bonds, CDRs, options, all of them. Furthermore, they are completely arbitrary and can be manipulated on a whim.
The value of blockchain currencies is in the complete absence of centralized regulation and manipulation, and complete immunity to tampering.
Who the hell wants fiat? It's starting to become a time where if you want that house, that car, that drug then maybe you should inquire about paying in Bitcoin directly.
Who wants cash? Everyone has cash. Its riddled with debt.
Google 'slaying the bearwhale' for lolz; the last time a whale cashed out, Bitcoin nuts actually convinced each other to buy up the coins as fast as they were released in order to keep the coin value up. Obviously the smart move if you really believed in Bitcoin's long term viability would be to let the price crash and buy at the bottom, but the Bitcoin ecosystem isn't exactly chock full of rational players.
The anonymity of Bitcoins seemed like a good idea because people assumed no one entity would own a significant share of them. Oops.
It's the same inherent assumption non-economists make when they talk about a "free market" (usually in an argument for very little to no government regulation) and assume that "free" includes traits that economists use to define "perfect competition".
I won't dare predict whether the current Bitcoin situation is setting up for a spectacular crash when a bubble bursts, at least not today. But it's getting harder every day not to conclude it's tulips all the way down.
Yeah it's "crypto". For all you nerds insisting on "cryptocurrency" you lost this one.
Bitcoin itself is a ponzi scheme though there may be crypto in the future that isn't and is more viable. And there's a really good chance it will be run by the major banks. You want a currency that's not controlled by the money men (and women but mostly men)? Narcotics and munitions work well in this regard.
The other financial markets already have tons of techniques for making large sells without tipping your hand and getting picked off by front runners, just ask anyone dealing with institutional brokerage. The problem with BTC is, the ledger is public, so if a whale starts moving a large wallet into lots of smaller ones people will know. If I was holding BTC I would definitely want to start breaking it up into lots of smaller wallets just as a precaution. Maybe this whale is getting some professional financial advice and doing just that.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
The valuation may be irrational but people bought the Bitcoins because they valued them higher than the sale price. No selfish actor waits until the price hits the bottom, because to know the bottom you have to know what everyone else is thinking. A selfish actor optimizes for themselves, and they do that by making the decisions that are best for them.
By sell you mean get a real currency
The interesting thing is that the real story seems to be missed entirely. Everyone wonders if it's a bubble or if the valuation is too high. That's not the problem. Bit coin is, in its present algorithmic configuration, doomed by it's algorithmic desgin features. Perhaps it will change but there's two flaws of which I will point out one here.
1. Roughly 2000 transactions can be rolled up into each hash completion event. And by design the system equilibrates towards a difficulty where it take 10 minutes for a hash completion to occur. This means that when this becomes popular it becomes hard to directly record more than 2000 transactions (less due to over heads on side transactions) every ten minutes.
That merely makes it slow. But when it becomes oversubscribed in demand for transactions then people pay bounties to get their transactions at the top of the queue. Right now that bounty is about $20 per transaction.
let's compare this to a visa card. A visa merchant might pay 3% for the service. thus on a $666 transaction you would pay 3% or a $20 fee.
Ergo, for any transaction less than $666 bitcoin is ludicrously expensive.
thus it is slow, expensive and unsuited for ordinary purchases. It could be used to move large sums of money but not simple transactions or even micropayments.
I beleive it is this, not the valuation of the coin that makes bit coin doomed.
We saw the first high visibility retreat the other day when Steam stopped taking bitcoin.
Some drink at the fountain of knowledge. Others just gargle.
Not really.
You see, Monopoly money is printed by Hasbro, with no natural constraints, much like fiat currencies (e.g., the USD) is printed by their respective governmental institutions.
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
All money is artificial. I don't understand why this point is so hard for people to grasp. Money is worth whatever value people collectively ascribe to it. Bitcoin is no different in that regard.
Might makes right irrelevant.
That would be an incredibly risky venture. The problem with shorting is there is limited upside and unlimited downside. IE the stock can never get lower than zero, the delta of the purchase price being your profit margin, but the stock has no cap on how high it can go, the delta being your liability. If you try to dump your bitcoin and it's instantly bought up by other bitcoin "whales" they get the benefit of temporarily lower bitcoin prices, and you are on the hook to cover your short.
So exactly what part of "Pyramid Scheme" do these idiot "investors" not understand.
Bitcoin currently has about 15 million userrs. So 1000 of them is only 0.0067%.
1% of the world's population owns about half the world's wealth.
By creating a currency ostensibly free from the corrupting influence of government control of fiat currencies, bitcoin has managed to become a currency which is 150x even more corrupt.
The big difference is that currencies don't rocket up and down by a factor of 12. That's what speculative instruments do.
Until the bitcoin value stabilizes, it by defintion cannot be properly used as a currency and will not be accepted as such by the public.
It's a fun roller coaster ride, but not a practical means of travel, to extend a metaphor.
On Triskelion, just 3 gamesters held 100% of the quatloo supply.
I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
But no, that's not the issue. The issue is that an inherently deflationary currency such as bitcoin, any other cryptocurrency, or indeed any commodity with a strictly limited, unmanaged supply, such as gold, is a seriously crappy means of exchange. Nobody would want to spend bitcoin, or invest it, or even use it to buy merchandise for resale, because it will be worth more tomorrow. Better to hoard it. This is a recipe for a deflationary spiral, and a depression. It's just basic macroeconomics.
On principle, I'm no Keynsian, but I have to admit, I don't really see a way around this issue. The only answer seems to be some sort of monetary policy.
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
Yes, we get the theory, thanks.
All money is artificial. I don't understand why this point is so hard for people to grasp. Money is worth whatever value people collectively ascribe to it.
Real money is worth what important people/organisations/countries ascribe to it.
The only people ascribing any value to Bitcoin so far are the the people who own enough to think they're going to be magically wealthy, for free.
No sig today...
>So exactly what part of "Pyramid Scheme" do these idiot "investors" not understand.
"Shut up you're just jealous because you didn't get in early and I'm going to be rich for doing nothing while you work like a sucker".
I think that about covers it.
Well... if you "get the theory", then why did you ask "wth is bitcoin"? Sorry if I was being pedantic. I just assumed you were being sincere.
As for the "important people", I guess the determination of who is "important" is left as an exercise to the reader? In the meantime, I don't consider this concept to be a rigorous criterion for defining what makes a currency a currency. No money is more "real" than any other kind of money. All money is worth what people ("important" or not) are willing to trade for it. This seems so obvious as not even to be worth saying... and yet, this elementary point seems to be lost of many people.
Maybe you are feeling a bit bitter because you missed the boat? I'm not sure... but I'm sensing a bit of attitude from your side.
Using my new South Seas Flowercoin algorithms, I have cornered the world market in Tulips, and it will never stop going up up up!
-- Tigger warning: This post may contain tiggers! --
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange.
Mostly; the online exchanges just aren't equipped to handle massive volumes, as we witnessed Coinbase crashing. If they REALLY wanted to unload such a massive amount, rather than simple trading...... the most efficient way to get the most bang for their $, would likely be to find a large buyer directly ---- for example, sell 25,000 BTC to a major bank or investment firm at a small discount to the exchange price, rather than trying to dump it on the exchange, and getting a lot less $$$, because the price goes down on the exchange the more units you sell, and before you know it the buyer-demand is exhausted and short term price is less than you want to sell for.
silkroad v3.1 is doing just fine apparently, Ulbrict must be running it from his cell.
Bit coin is digital "hawala". The price is high because
1. Greater fool theory
2. By pass regulatory bodies to move money around
3. Anonymity in getting some**** services/products
4. 98% of people do NOT understand technology
5. 99.9% of people fall into fad trap
6. Lack of governance (is good but will be a liability soon)
7. Premium is on trust.
I've been making money all week. Don't know why everyone here calls it a pyramid scheme or even scam. Don't forget its also a bubble that is going to pop! Said everyone when it hit $100, then $1000, then $10,000. Almost hit $20k but self corrected down to $15k now.
Only the State obtains its revenue by coercion. - Murray Rothbard
Gonna be fun watching what happens when it goes splat. It's already bigger than Madoff's Ponzi scheme, and what's going to be left when it crashes?
and Trump hasn't been mentioned once.
What a blessing.
Please, give us more bitcoin stories.
Holders of large amounts of bitcoin are often known as whales.
Not to be sub-classist, but everyone knows cetaceans are trouble makers, especially dolphins. I'm worried that their laissez-faire attitude toward life may infect monetary stability, solvency and policies.
It must have been something you assimilated. . . .
I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
No, Bitcoin is the volatile one, not USD, because USD remains relatively stable against all other currencies such as GBP, the Euro, or the Yen. Bitcoin fluctuates wildly against all of them... and it is the odd one out... bitcoin IS the one wildly swinging compared to the others.
The reason it matters is that you'd be silly to purchase anything with bitcoin at the moment, not just because of the charges involved ($20... has to be a fairly big purchase before $20 charge becomes negligible), but also because with bitcoin going up so much, what buys you a burger today will buy you a supersized combo meal tomorrow. A Ford Festiva today or an Aston Martin next week.
At the moment bitcoin is an investment instrument, not a usable currency. That doesn't mean it always will be. It will stabilize eventually... the question is- will it pop before stabilizing or will it plateau gracefully. No-one really knows. Once it's stable- it could be a meaningful exchange for large purchases... fees will probably be too much to use on a trip to Tesco for a bag of mushy peas- but if you're exchanging a million dollar transaction between two major corporations *cough drug dealers* then a $20 fee is chump change.
"That's the way to do it" - Punch
The requirement of all transactions being digital is an immediate fail for this currency.
The part where it applies to Bitcoin. The question was asked, "who is at the top of the Pyramid?" and this remains unnamed. Your belief that BTC is a pyramid scheme is a delusion. BTC is clearly a "greater fools" game, which is different.
Well... if you "get the theory", then why did you ask "wth is bitcoin"? .
He didn't
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
Find the investors, or at least 500 of them. Station a snipper at each location.
Problem solved.
That is, if they blackmail the bitcoin market, we can do the same, physically.
If the value of the dollar went down, that would be good for the United States, not bad.
"Bitcoin's value fluctuates by 1000% in a single month"... ...Is objectively 1000% good news when trying to find more bag holders in a pump and dump scheme. It surely applies here as well.
Your describing rational actors, not the droves of uninformed people who can only see the upside potential: "1,000% in one month? That's like 12,000% a year potential return!"
There's a reason the casino is filled with "jackpot" machines and not blackjack tables.
It would mean imports would become more expensive, and other countries would find our exports cheaper. That means that the US standard of living would decline. If people from other countries wanted to invest in the US, they'd get more for their money.
It would be a fairly gentle way to force some austerity and stimulate the economy. If we didn't need austerity or economic stimulation, it would just mean we got less stuff, depressing our standard of living.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
BTC will NEVER be currency because of the inherent problems with the block-chain (ledger). BTC as its own form of crypto is relegated to nothing more than a "digital gold standard" of soft. But this implementation is nothing more than a ponzi scheme rich mans fight club. It's primarily the wealthy that are slugging it out with other wealthy people. AKA, the "Whales". For the other people that aren't one of the 1000 whales out there, don't play in. One or more will simply devour you this late in the game.
Life is not for the lazy.
Maybe you are feeling a bit bitter because you missed the boat?
I'm not feeling bitter, I'm worried. Many of us naysayers are people who have been investing for a long time and have healthy portfolios. Bitcoins as an investment was too risky for me when I first heard of it and it's too risky for me today. It's for that reason I have no regret.
It doesn't matter how much your bitcoins are worth today if you don't sell at least some of them. I see is a huge potential for a lot of people to lose a lot of money. I don't want to see that happen. I genuinely hope I'm wrong.
There will be a race among whales to buy puts and sell their shares, assuming it hasn't crashed before than by other whales selling w/o the puts. Small timers should get out now.
The Niceahash hack took 4000+ coin out of circulation, possibly for good. If the thieves can't spin their wallets and spend some of it, it's gone forever. 21 million coins can exist, and now a chuck are gone. Those coins were mostly held by small time miners and investors.
Re: the Monopoly money analogy, like digital commodities such as Bitcoin, Monopoly money has no government and tax paying population to back it up. You can't have a currency without these.
Macroeconomics 101: All currency is actually debt which a government promises to pay back based on the labour and resources (i.e. tax paying population) under its control. A government issues currency (debt) and allocates it according to national and political interests. The working population then pay off that debt through labour, trade, and natural resources. That's how countries work. In essence, it's the nation that is the security underwriting a currency.
There's no such security underlying Bitcoin, which is a virtual commodity, so it can vaporise in seconds without any consequence for people who don't hold Bitcoin. Nobody can be held to account to re-inflate the value of Bitcoin. Which government or bank is going to do that?
Debate is a form of harassment. Do not question my truth.
Now all the fantasy fueled libertarians should understand why the SEC is truly a great and necessary institution!
Yep, you have provided an accurate definition of fiat currency, at least since we went off the gold standard some half century ago.
You are also absolutely correct that cryptocurrencies do not fit this definition. If you prefer, we may call them commodities, but does it really matter? This is semantics. Regardless of the label one attaches to this instrument, the fact is that the market currently regards 1 BTC to be worth some 15000 USD. It isn't really up to me or you to decide if this valuation is "real" or not. If you believe this is a ridiculous bubble, then you should avoid buying, or, better still, go short.
As for being a true currency, i.e. a useful means of exchange... that is indeed a harder point to make. Being inherently deflationary, it's actually a disaster for this purpose. Nevertheless, various companies do gladly accept payment in bitcoin, possible most notably Overstock.com, and I understand that Amazon is planning to do so as well.
Higher exports leads to higher employment leads to higher wages. The impact could be on average beneficial or detrimental, depending on thousands of other factors. Please don't oversimplify.
I think the last month there has been a covert media campaign against BTC ... not really my problem since i got fucked out of it since mtGox, its too much at once however, suddenly everywhere there's stories from how its not green (as if cows or biodiesel or farting human babyspawn is) and how nobelprize winners shout that escobar couldnt have done it without cryptocoke ... its all too sudden and all too much
... globally it really makes no dent at all
not yet ... if you go down to the eight satoshi however ... i once tried doing the math (but im not the numbers guy), i think if the last satoshi would be worth $2000something and all BTC was mined (and none would have been lost) the total value would equal the total dollar value in the world.
Which must be a scary concept to the united lobbies of the free world and CEO Nwabudike Lehmann
so i'll consider this just another part of the media anti-campaign by the ancientt vampires that be ... STRIGOOIIIIII
either its an assault by the hasbeen powers that be or an attempt at coordination to dump the price (for obvious reasons if you're a holder and get in on the first wave of massive selloff and buy back in right after) HOWEVER
and that was 2015 : https://www.theguardian.com/mo... compared to that , this is not a bubble but a drop of already steemed on a hot sizzling plate
Free speech was meant to be free for all... how can anyone grow up in a nanny state ?
so it's pretty much the same as with 'real' money, where the top 1% has 50% of the whole worlds wealth.
On a long enough timeline, the survival rate for everyone drops to zero.
If you want mine your own cryptocurrency, you need a motherboard with 19 PCIe 1X slots to plug in 19 GPUs and a couple of 1200W PSUs.