Bitcoin Forum

First, a little bit of background.

In 2012, Dorit Ron and Adi Shamir published a paper analyzing the Bitcoin transaction graph, in an attempt to understand how much could be determined about the largest BTC holders, just from the publicly available info.

They concluded, among other things, that there were a dozen or so "entities" who - even in 2012 - were holding several hundred thousand BTC each:

Entity ID	Address Count	Total Incoming BTC	Transaction Count
A	78,251	2,886,650	246,012
B (Mt.Gox)	156,722	2,206,170	477,526
C	13,289	941,013	77,525
D	12,520	867,996	48,347
E	191	692,864	1,353
F	12	660,000	23
G (Instawallet)	23,649	633,606	92,593
H	9	580,000	59
I	10,561	514,066	49,550
J	4	500,021	6
K	134	479,254	1,039
L (Deepbit)	2	452,929	814,044
M	9	442,000	10
N	128	432,161	137
O	10	432,286	14
P	1	432,078	3
Q	14	430,490	23
R	2,124	321,866	300,486

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Last night, I dreamt that I checked BitcoinCharts on my phone, only to see that someone had dumped a huge number of BTC onto the exchanges, causing the price to crash to about $2.

As you can see from the above chart, this is not an impossible situation. The whole order book of the big exchanges is "only" about 200,000 BTC deep. If one of these Entities were to rediscover a lost wallet... or if the price were to reach their "exit price" that they'd decided upon long ago... it's easy to imagine that "get all of my money out before anyone can react" would become more important for them than getting the absolute best price for it.

So my question here is... if this were to happen, what would happen next? Would the price bounce back, bolstered by confidence that this sort of holder was less likely to still be lurking around? Or would people get scared, and try to sell off their own BTC too? How would miners act? How would exchanges act? Et cetera.

Question is, why would they dump all coins and crash the price? If I would own that huge amount, I would dump max. 1000 coins daily to not drop the price.

I just checked bitcoinwisdom and seen that somebody dumped 3k coins at once on bitstamp (and 12k coins at bitfinex) a few hours ago. In the past, that would lead to a crash. Now, the price went down to 6.5k and is already back to 7.3k. It gets harder and harder to manipulate.

i will celebrate that day and will invite all of you to join my party.

you see, one of the things that i like about bitcoin is its distribution. it never had things like premine. you could mine any block from 1 to today if you were willing to do it and get the reward. you could always buy any amount you wanted too.

but something that may bother many (not exactly unfair but lets call it unfair) is the early adopters who got 10000 bitcoin for only 100 bucks for example. if any one them "dumps" that means that much bitcoin is being re-distributed among lots of people. lets say 1000 people will hold that 10K bitcoin instead of one. that leads to a fairer distribution.

Hah, they would need to think of how to get that fiat out instead of thinking to offload it and get away with it pretty easily.

Have you also wondered why there hadn't been much of a dump like 100k in a single splash? Probably because they are also aware that once they do, the government would be alerted and be interested about the situation resulting into an even more headache they would face. I'm not even surprised that no one does, but I know someone still has these fat wallets active but cannot dump all at once due to the governments possible interference once they release those.

This is a very interesting question and I'm sure many have been thinking about it.I think it's possible that something like that happens,because people sometimes do not think too much logical.As others say,it is not hard to sell at once some big amount of BTC,but I think it would attract too much attention.However in the event that something like this happens,price will go down very fast and there will be panic selling and after some time the market would start to recover.

Personally I would not want to something like this happens,but we should always be prepared to all possible situations.

if an old hand dumps big amount bitcoin will crash for sure

But I wonder ! ??? if the famous exchange sites bitfinex and bitstamp , bittrex  will allow the deposit and circulation of these huge sums ?

answer No for sure

that mean exchange sites bitfinex and bittrex.... are the ones that control prices

True, why would they dump everything at once while they could get a better price is they sold gradually (1000 coins a day like you said). And even if one of the entities you listed would be so stupid to dump all their hundreds of thousands of coins on the market and it would drop to $2, investors and hedgefunds would massively stock up on bitcoin causing the price to bounce back up again insanely fast.

the bitcoin demand is big now,, so if they dump the coin, of course it will make the bitcoin price down,
but, slowly and surely the price will be back on track, because of the demand , and the believer from bitcoin that always waiting for this

As big as demand may be. 99% of all btc is in the hands of something like 10 people. If even one of them decides to dump,  even partially,  the price completely collapses. This in turn will cause a chain reaction of others panic selling where the price drops probably to single cents permanently. Trust in Bitcoin will be gone forever.
A matter of time really. When,  not if.

Price manipulation is no longer easy for the whales with that high bitcoin market cap and high demand. Even if they sell all their coins, price is corrected very soon.

And if these holders sell their coins I will be very happy as coins will be distributed among the people more properly.

This seems all like science fiction-conspiracy theory. First of all, show me the actual proof. Where did the guy that made this research come up with these entities from?

Show me the evidence (with links to a blockchain explorer) of 2,886,650 BTC belonging to the same entity.

Supposedly, Satoshi was the highest stakeholder with near 1 million BTC. This is easy to find, you just need to sum all the early mined BTC. And I heard some people say it was never anywhere close to 1 million anyway.

So who could this entity A be and where is the proof of 78,251 addresses pointing to entity A?

Maybe Here we make sure that sites exchange Affects prices bitcoin  ::)

Thousands of user accounts are locked in bittrex and poloniex and And in many other sites exchanges (https://bitcointalk.org/index.php?topic=2279516.0
https://bitcointalk.org/index.php?topic=2325580.0
https://bitcointalk.org/index.php?topic=2338497.0) for avoid dump bitcoin and Keep up the bullish trend ???

It’s not inconceivable that someone would attempt to cash out a huge number of Bitcoins. However, the seller could only get top price for a portion of those coins because he would have to sell against lower buy orders the more that are sold, even if they sell across several exchanges.

They would be better off selling gradually over the course of a year or so to make sure the price doesn’t tank. But anything is possible but I doubt someone would want to make the market tank especially if it affects their money.

just think about it, 1000 bitcoins are over 7 million dollars right now, 10k bitcoins are 70 million dollars, and the list goes on, this is a very huge marketcap for bitcoin, if more than 1 million of bitcoins are dumped, the whole marketcap will go to the hell, and this is not because i am saying it, it is true.
just do this math, 1m x 7600=7600 million dollars, this is more than a 15% percent of the whole capitalization, and bitcoin will go down to five thousand dollars for sure.

Thanks for the replies, all.

To be clear, this really is a "What If" scenario more than anything else. I agree that in most cases, such a person probably wouldn't try to dump all their coins all at once. With current order books, it'd be better to do the job in small batches; even if you're worried about people noticing a huge, old coin stockpile moving on the blockchain, and trying to front-run it onto the exchanges, there's ways to cover your butt - those cash-settled BTC futures that CBOE is going to launch soon, for instance.

I think if a huge holder like this did just do a market sell, the price would recover almost instantly. That kind of thing actually happens already from time to time, when someone with deep pockets fat-fingers a trade (see, for example, June 23rd 2016 on Bitstamp, or June 22nd 2017 on GDAX). The price almost always recovers instantly, because the order books on one exchange only represent a tiny fraction of the actual demand.

But a slow sell-off could also work out okay. About 10,000 BTC are traded daily on any major exchange, so 2-3kBTC daily might fly under the radar without tripping dedicated traders' "big money is cashing out for some reason" alarms. It does mean that you have to wait a few months to get all your money, but with withdrawl limits at most major exchanges (as @dothebeats mentioned), that was probably true already.

Paper is here, including methodology. (https://eprint.iacr.org/2012/584.pdf) The appendix includes transaction graphs, with amounts and datestamps included.

If your math is right (and I'll take your word on it), it could happen.  But those whales would be stupid
to dump all their bitcoin onto a falling market, so I don't think this is even a remote possibility.  They'd
be smart to take some profit but not to crash the market.  And even then, we're in a strong bull market
and people would be snapping up bitcoin like it was a red light special at K-Mart.

In addition, those buy orders are not static things.  If all those coins were put up for sale, I suspect
people would be jumping in with both feet.  Regardless...it's a hypothetical question only, not a reality
that I think we're likely to see.

It is possible that we could see some big dumps after the current fork,i am expecting that to happen this time around because of the two opposing factors trying to claim which fork would be better and i would not be surprised if satoshi suddenly appears and start moving his millions of bitcoin around and if that happens,there is no doubt that the market will crash instantly. ;D

The price would collapse, but buying would be so frenzied that it may not collapse very far. There's an awful lot of money sat on the sidelines for such scenarios. And that's before we even try to bother finding out why.

Hard to really say, since it depends heavily on the market and the overall mood of the people in it.

More interestingly though, how many of those 100k+ Bitcoin addresses do you think are no longer accessible? :D

200,000 BTC is a lot of money, and it's a lot of bitcoins that not just anyone could have gotten even in the early years. They are going for $7500 each right now, so why would they sell any for $10? They wouldn't sell them all at once at any price when they could sell them at a high price over time and get hundreds of millions of dollars more. Only an idiot would "get all of my money out before anyone can react" and we know that they aren't an idiot because they were able to accumulate such a huge amount of bitcoins in the first place.

You have quite a proposition here and this is very possible in every aspect that you said in your post. But, I don't think that someone in their right mind will do that especially with the price that we have right now. They might sell some of it but will not do it from all of their stack of BTC. Their right move would be sell some while the price is climbing and wait again for the right time if the price goes down.