Bitcoin Forum

Say an interested party has 10 times Bitcoin's market cap to spend. He buys up the entire order book on the largest exchanges. Once he holds a significant percentage of all bitcoins, he waits for some kind of negative news, then dumps, causing panic sells, which he buys up at the bottom. He repeats this pattern until he owns as many bitcoins as HODLers allow.

How would this affect adoption and confidence in the market? Is there anything that would or could prevent this from happening, aside from the amount of fiat money required?

First there are limited money transfers. Without notice 15Keuro limit. So this would slowdown the process you are talking about, significantly.
Second, exchanger would probably suspend huge account, under suspicion, big movement, big risk of fraud or account takeover etc.

You really think that would be a problem for someone will $100 billion to spend?

Assume such limitations of the legacy banking system are not an obstacle.

And yes, it would be a slow process, say over several months, so that it can go quite unnoticed.

This goes back to a game theory, someone did a presentation a couple years ago at one of the conferences.  I think it was called brower theorem.  What happened is that the buyer gained no benefit. Consider this, you're playing the game of monopoly and the paper slips of money have value because the other players need it. If you have all the money, it's not as valuable because the other players can't use it. At some point, the value of what you hold loses value as a commodity. A bank could buy all the bitcoins available to destroy it, but then everyone could just use Bitcoin2, etc.  A similar situation happened on testnet, some a-hole started supermining all the testnet coins to sell them, so testnet was reset.  8)  Truth in numbers goes both ways.

Say an interested party has 10 times Harley Davidson's market cap to spend. He buys up the entire order book on the NYSE. Once he holds a significant percentage of all Harley Davidson's stock, he waits for some kind of negative news, then dumps, causing panic sells, which he buys up at the bottom. He repeats this pattern until he owns as many shares of Harley Davidson as "hold"ers allow.

You can say the same about any thing else that is traded on an open market.

So even if he could get 50% of all coins, or even 80%, he wouldn't be able to influence the price to the point of causing permanent/long-term market confidence loss?

Don't know.  You'll have to find someone willing to try it in order to find out.

My guess is that he'd loose some percentage of his purchasing power to the speculators each cycle until eventually he didn't have enough left to significantly influence the price.

Buying that much bitcoin would put a huge demand pressure on the exchange rate, meaning that as he completed his last few buys, he'd be buying at a very inflated price.  Then if he waits for bad news, the price will have already dropped by the time he starts to sell, meaning that he could be selling some of his bitcoins for a price less than he bought for.  If the bottom fell out and the price completely collapsed, he could be left selling his entire holdings for much less than he spent to buy it all.

Then as the market recovers, he starts buying and driving the price back up.  Before long, he is buying at the new peak price (only he has less bitcoins this time since he has less fiat available to buy the bitcoins with.  Then with bad news and a price collapse, he is stuck once again selling for less than he spent to buy the bitcoins, leaving him with even less buying power.

Repeat the cycle a few times and he's left with so little buying power that he isn't going to make a difference anyhow.

no one can be detained. the big players have a lot of money. they can do anything with their money. with strong financial strength and superb trading capabilities they can be the strongest.

Exactly where would he be able to buy such a significant amount of coins? What order book has so many coins within the ask side? Examples:

Bitstamp:
Bitfinex:
BTCChina:

---

If we assume that the person would use USD (solely) they'd only be able to take ~41 423 Bitcoin (draining 3 major exchanges in the process) before the cost per Bitcoin would grow exponentially (assuming a instant buy-out). I don't think that this represents a significant amount. I don't think that anyone could correctly predict that would happen. Maybe someone who excels in economics and investing?

Of course as the price headed upwards, there'd likely be more bitcoins joining the market (both buyers and sellers).  Profit taking sellers would jump in selling more bitcoins for this theoretical attacker to buy, but speculators would also come in and buy up some before the "attacker" could get them (potentially selling to the "attacker" later at an even higher price).

lauda making logical sense on this topic, good

to add to his comment.
the exchanges themselves know a general direction a price will go before an order is made. simply by knowing if more dollars or bitcoins are being deposited.
its not an exact science, but they can see changes in supply and demand at the time of deposit. long before the customer gets to place an order

as soon as bitstamp sees a whale deposit $14m. bitstamp would raise its own "ghost" orders to higher prices. so the whale wont even be able to buy all of them 10,916btc, as the prices would change before the dollars have "cleared" to be able to allow the whale to make an order

as soon as bitfinex sees a whale deposit $20m. bitfinex would raise its own "ghost" orders to higher prices. so the whale wont even be able to buy all of them 23,686btc, as the prices would change before the dollars have "cleared" to be able to allow the whale to make an order

as soon as btcc sees a whale deposit $7m. bitfinex would raise its own "ghost" orders to higher prices. so the whale wont even be able to buy all of them 6820btc, as the prices would change before the dollars have "cleared" to be able to allow the whale to make an order

With seeing current volatility nobody will be willing to invest more than 100billion $ as it is not a small amount usual trader can risk and can hold for longer term. TO make atleast some return he have to again sell them but after seeing price pump many will try to short just like how price goes down from 800$ to 600$ or even lower within 2 days. This will never gonna happen.....Never.

I don't think so that exchanger would probably suspend huge account, i mean to say that why he/she would do such a thing, the whale doesn't harm his exchange as the exchanger is getting the cut from the amount the whale is trading as the trading fee.

With Satoshi holding so many coins, people will start panicking when they know he is selling... Likewise, knowing someone (if he is successful in acquiring the bitcoins) is holding large amount of bitcoins will create fear in all users, worrying about his next moves. People will dump bitcoin and leave, causing huge harm to the network.

price drama is temporary..
but lets delve into the slimmest chance that the real satoshi returns..

once his coins are sold. thats it.. other people have them.. then the satoshi "hoard" is no longer in question.

during the short term price drama of that event people will not think of it as doomsday.. but instead DISCOUNT DAY as the price will tank. and losts of people will buy cheap coins..

then the price will recover.. drama over and everyone can finally stop asking about the satoshi hoard

Bankster McEvol is not trying to become fabulously wealthy from BTC. If he sees it as a threat, he destroys it, at a nominal cost to himself.
Think of it as our immune system attacking our own cells to get rid of a virus.

So if you just lost a fortune because Bitcoin 1 became worthless, you'll magically get more fiat & invest that in Bitcoin 2 (which will also become worthless)?
By the time we get to Bitcoin 3, even the True Believers would learn to stop throwing away their money.

There is just no way to accumulate that kind of size off exchanges without moving the price significantly, and that's going to get even more pronounced after the halving kicks in.

i think the issue here is not about whether or not someone can do this. the biggest part is WHY ?

if the reason is for profit then i have to say that there are so much easier methods of making money with that much money and not do this.

one of the easiest methods is to start a new coin yourself and advertise the shit out of it with 1/100 money that you need to do what OP is saying then premine almost all of it then start hype > pump > dump for profit > rinse and repeat (if process sounds familiar because it is the process used in ethereum)

Why would this need to happen off-exchange? And what makes you think it hasn't happened/is not happening now?
Daily exchange volume is ~$300mil.

Well, if we're to take some people here seriously, Bitcoin aims to make legacy finance (& even governments) obsolete.

Well at the rate some of these reserve banks are printing "toilet paper" money, it could just be likely that enough fiat will be available to try things like this. Only problem is, the more they print, the less

it's worth on the open market. I have to say, some people have enough money to make a decent dent on most of the coins available on these exchanges. In November 2015, this was the situation with

gold : " The top ten largest owners of gold in the world are reported to control nearly 24,000 tonnes -- or over 768 million troy ounces. With gold spot prices at $1,100 an ounce, this metal would be

worth approximately $845 billion and represents about 14% of all the gold ever mined. "

...and yet bitcoin is only worth half as much US toilet paper as it was at its peak. How is this possible? :(

The price would simply skyrocket, making it practically impossible to buy most coins.

About $ 300,000,000 worth of BTC is traded every day.
ELI5 why it's impossible for a large player to snag enough coin to do what OP describes?

This is interesting, most people will set a limited price, and say I will buy under this price. This is realisticly what happened when w brothers enter the market. They bought every coin under 100 bucks.
Why nobody will buy all coins regardless of the price? Because that will make him the ultimate bag holder. We can always reset to another coin, especially Bitcoin has no intrinc value.

1. Say you're invested in BTC, you use it as a store of value, your "wealth" is in BTC.
2. BTC becomes worthless (you're broke).
3. Where do you get the money to buy BTC V.2.0?

well i doubt that someone would invest that much money in bitcoins in a single run, also people would dump a lot of coins and start dumping in order to make a lot of money of the price drop

i think the biggest thing that prevents rich people from buying a lot of bitcoins is the fear that they will lose a lot of money if they buy their bitcoins and people start selling in order for price to drop

If a larger played buys a lot of coins, it just means existing players get even more rich... so it gets even out. The more you buy the more expensive it will be to keep buying.

Seems a stupid scenario, how realistic is it to discuss 'one large player buying up most coins'. It'd have to be a sovereign wealth Sheikh or something to afford that.

Seems dumb to even think of it as a possibility, will never happen.

10 billion dollars "market cap" is a fiction, it's (bitcoin spot) * (total BTC issued to date). Of course, many of those coins became unspendable, and many are held by "I'll hodl this 4eva" zealots. The number of coins needed to move the market is ridiculously small, and what OP has described is commonly done, all the time. That's how exchange owners make money.

i dunno how much patience the market would have for repeated monster dumps. at some point most people are gonna walk away leaving the mysterious buyer to play all by himself. it's a great way to burn your billions. can't think of any other reason to do it.

Its almost impossible to make a new coin and try or force big investors to don't buy a huge amount of coins,since they see potencial they will invest ,very easy to understand.

Those coins are probably traded frequently, there will be millions of coins that never move and would be held regardless of price.

The ultimate goal of buying all the Bitcoins would be stupid anyway, if they suceeded they would end up with a worthless personal coin, which people wouldn't mine anymore!

The Hunt family tried to corner the silver market in 1979-80.  It didn't end well for them.
https://en.wikipedia.org/wiki/Silver_Thursday

Other examples:

https://en.wikipedia.org/wiki/Cornering_the_market

If someone tried to do that with Bitcoin, history would likely repeat itself.
There would be a huge bubble that would eventually burst, and life would go on.

Of course those coins are traded frequently.
And of course there are millions of coins that will never see daylight, because lost and/or hodlded by fanatics who'll "never cash out." That only makes the sum required to move the market smaller, not greater.

If most of the bitcoiners are to be taken at their word, Bitcoin will make banks and governments obsolete.
So either this place is full of kids talking shit, or not stupid at all...

@jonald_fyookball: The goal is totally different. In my scenario, bankers aren't trying to get rich off bitcoin, simply to kill it, as one would kill a virus or a parasite.
If bankers wanted to get rich off BTC, they could do that too, same as exchanges are doing it now.

i doubt that the price would grow that much that it would be really hard to buy any of the bitcoins because if you want to push the price that much you would have to be the richest man in my opinion

i think that most of the people are buying bitcoins to make a lot of profit in the near future while people who are already rich dont need to do that, i guess thats the main problem

What stops a large player buying a huge amount of coins is that the stability of that coin is not as he wants, and seeing the recent price change every big investor should be afraid, buying the entire book would increase the price of bitcoin pretty good.

Pretty sure the exact scenario described by the Op has happened, drove BTC all the way to the $780 top, then dumped big time to $555.

The Bitfinex CIO was in Whalepool chat describing something similar. During the rally, he said there was a contingent of market forces that take advantage of the low liquidity on weekends to spike up the price. He didn't go into details, but it sounds pretty easy for a multimillionaire.  

I don't think people really understand the economics behind supply and demand and game theory, its like those "what if fed just prints infinite money and buys all bitcoins?" guys.

Manipulation happens all the time in investing.  But in this case the investor would be cutting his own throat. 

I ask that every day nobody responds to https://bitcointalk.org/index.php?topic=1354558.0

you can't expect anyone to take your offer for reasons that should be obvious so I assume its a joke.

Yeah, but a big buyer could do it over multiple exchanges and could take his time about it.  I've kind of wondered the same thing myself--what would happen if Warren Buffett got interested in bitcoin, or any of the many billionaires that populate the earth.  They could easily buy up a majority of available coins without batting an eye.  Not sure why except to corner the market, but it is possible.

Don't think it's going to happen though.

You'd have to have the surname Rothschild.



But then didn't buy up again. After enough such cycles, he would've left the price skyrocketed and liquidity low after panic sells.

The point would obviously not be to profit numerically, but rather systemically, i.e. to destroy what is perceived as the largest threat.

No one can handle it, that's one advantage of bitcoin. It can end up being centralized by big whales and it might crash the bitcoin itself once people knew this thing is happening in bitcoin environment.

But the fact right now is that most of the supply of coins is widely scattered and it would be very costly to try to even buy all of them at once. At the very least, it may not even be profitable to do such an act because it's very risky like when a big whale is hoarding all coins and then a sudden drop of value, he'd surely either be enraged for losing heavily or be traumatized.

Pretty sure this is exactly what is happening...

For now if you are relaying for the price when the price is 700 value why you are not selling bitcoin and i think this is exchangers are wise they are not so greedy the are just exchange their coins to make a profit because they know already what will happen . that autralian who sell his bitcoin when the price level is 700 value above its effect the price and people are panic sell too because of movement of the price and i think not all people notice the the price only traders.. centraliation is not possible because many people are still holding more bitcoins not only china or exchangers..

though i guess its not the thing that would hold big whales from buying tons of bitcoin and then holding it or even selling on bigger prices, i think there are other reasons

maybe whales who already have money are afraid that bitcoin price will be dumped in the future so they better not hold their coins in order not to lose money from the price dumps

What makes you believe that?

this can only happen in altcoins markets because they are pretty small and a "large player" there can mean a very smaller amount of money to change things to your advantage.
but with bitcoin you will need a very large amount of money which then would not exist in one place and even if it is possible then it would be stupid to buy bitcoin with all of it just to control things.


the tinfoil hat that he is wearing told him so :D

no i dont think so. i am confident that the price will not fall down and the prices will remain stable. i think people are now understndind the importance of bitcoin therefore they will not create panic while selling the bitcion at the same time.

People demanding increasingly high prices once they realize somebody is "buying up most coins"?

You are obviously not an economist, are you?  :-\

For the larger players, they want to use bitcoin, not just a tool for speculation. So the transaction confirmation is important to them.

It wouldn't be "just to control things"; it would be to "not lose control over things".

This is the same with anything valuable: a rich person can buy a lot and raise the price.

How are we missing each other on this point? On this date 1 bitcoin is worth $672 US. I hope you not referring to the total dollars in circulation, because that would only make this worst. The amount of

money in circulation has nothing to do with this... well a little bit, because it shows us how worthless is has become. Bitcoin has also been the best performing currency for the last couple of years.. the

rest of them are just losing value all the time.  ::)

well then he would spend trillions to destroy a currency, which no one would ever do. if you are that rich, you should be smart if to know that spending that much money to take out a currency is useless.

Lack of liquidity and HODLers.