Slashdot Mirror
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.
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%...
...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!
The whales could have much to gain from tanking Bitcoin: Hold the coins to keep the value up, wait for publicly traded companies to form specializing in BitCoin transactions, then (before governments clamp down on cryptocurrencies or any strong signs of a coordinated clampdown are apparent), short those companies and dump the coins. Quickly use the money from the coins to buy even more short orders, and laugh at the collapse all the way to the bank.
"When information is power, privacy is freedom" - Jah-Wren Ryel
no, the size of the money supply is too massive compared to any billionaire dollar holdings. There are *countries* that could affect the dollar with their holdings, but no individuals
"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."
Bit Coins are so valuable that they are worthless.
It is like having an infinity dollar bill. No one will be able to give you change so you cannot use it. Bitcoins are growing so fast, that a complete idiot would purchase anything with them. Because you cannot purchase anything with them, then it is just imaginary wealth.
You could sell them, but if the price next year goes up by a factor of 100 again, then you will be kicking yourself for buying that car or house where its value will not match to what you had spent.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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.
nonsense, the banking system and countries will always be the big players and *by design* would grow to quadrillions in holdings as the trillionaires came into existence, it can't be otherwise since the debt the trillions represent are the banking system's asset.
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.
Because you cannot purchase anything with them,
I've been purchasing stuff with them since early 2014. That's actually the only reason I had any. I bought a handful at $500 and have been buying stuff twice a year with them.
I actually just sold off one to break even on my original buy and make everything in my non-MMJ state 'free' for the last 4 years.
Check the UID, you got trolled, bro.
I'm a good cook. I'm a fantastic eater. - Steven Brust
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.
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.
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.
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.
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...
>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.
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.
Some people are worse at guessing than others?
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
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
Most of the stories are anti-Bitcoin. If Slashdot ever posts "Bitcoin price stable for over six months, retailers flock to adopt new currency", then they'll be publishing a positive story about Bitcoin.
"Bitcoin's value fluctuates by 1000% in a single month" is objectively terrible news for Bitcoin, even if it's great news for speculators who got in early.
You are not alone. This is not normal. None of this is normal.
If you own bitcoin, and haven't converted to other forms of currency, then you're not making money: You're like a homeowner whose house value has gone up a lot: you have value on paper.
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