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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.
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.
I was about to say the same, but with some numbers for context:
Currently, about 700,000 people hold 50% of the world's wealth. While that's 700 times the number of people in control compared to BTC, it also $280T or roughly 1000 times the total market cap of BTC.
https://www.usatoday.com/story...
https://blockchain.info/charts...
I'm sorry, but your opinion seems to be wrong.
Unable to google even remotely well or just unable to type? Clearly it's not the latter: https://www.theatlantic.com/bu... http://www.zerohedge.com/news/... Notice how those graphs trend over 50 years at a time? There are surely peaks and valleys in them but those are still measured over years if not decades. In a pre-industrial, pre-bank, heavily agricultural world rife with plagues and famine, that's not exactly surprising. Meanwhile bitcoin is here: https://en.wikipedia.org/wiki/... It's not even remotely comparable in any, way, shape or form. Timeline is not something to discard so wantonly. The fact that 40% of gold isn't held by 1000 individuals is another huge red flag in the comparison. And as I type this, bitcoin has lost 10% of its value in a few hours this morning (9:30 AM CST). This has happened multiple times in the last month. Gold has lost some pretty heavy chunks of its value in a day, but that kind of fluctuation has happened maybe twice in the last 50 years and it's quite hit that 10% threshold. That's because while gold has easily and is often speculated on, it also has intrinsic and explicit worth in the form of jewelry and industrial use. Bitcoin, as of now, really does not have anything comparable in terms of use. It's neither the most efficient way to acquire something nor does it do something better in terms of technology than most existing technology.
Speculators make money out of the volatility of bitcoin. They need its value to fluctuate a lot because they sell when it's high and buy when it's low, and if its value is going up and down by 20% a day then there's a huge opportunity to make money. As such, they have a vested interest in both positive and negative hype, as long as there isn't enough negative for everyone to try to cash out at once. A story like this may panic people into selling, letting them buy low and then sell again when the price peaks after the next bit of positive hype.
I am TheRaven on Soylent News
Isnt everything just imaginary wealth? My house is only worth what it is because everyone else around here is willing to pay X amount for any that come up for sale. Paper money is just an IOU from the govt.. and so on and so on..
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.
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.
OTOH if it goes down by 100% in the next week, you will be kicking yourself as well.
Hindsight is 20/20. If I only had played that lotto numbers I saw on TV, I would have turned 2,50EUR into 25.000.000EUR.
It went up 4.000USD in 1 hour. Going down will be even faster. And if you are not awake and sell above buying price, the few minutes it takes could mean the difference between stepping out rich and getting out broke, having lost all you invested.
I wish you and everybody else their wealth. I trust it less than the average share on Wallstreet.
On a non-related point, are you interested in Tulips?
Don't fight for your country, if your country does not fight for you.
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...
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.