Bitcoin Forum

Hello fellow users,

Let's assume I want to buy 200k-400k BTC in the next few months. This represents the number of Bitcoins generated by the global network in 1-2 months, and also about 1-2 months of average volume at MtGox (which indicates most miners resell everything). How do I buy by minimizing disruption of the market?

1/ MtGox's volume info includes the dark pool. Based on the known volume (~7k BTC/day) it is not large enough to avoid a price eruption.

2/ There is not enough liquidity from my viewpoint on any other markets, including the OTC market.

3/ I could invest the money in a mining farm, but I would probably need to hire someone as it seems time-consuming.

I would like to hear some of your ideas. There are many smart folks here.

Edited to fix some errors in my reasoning (thanks FreeMoney).

I think you posted in the wrong forum, the right forum in my opinion would be economic or technical.
Here people do real trade.

On average there are 6 blocks an hour which comes to (6*24*50) = 7200/day. So you are looking at <28 days worth, not 2 years. Even this much will move the market substantially. What do you think happens if you try to buy 5% of all dollars? Or 5% of all gold? Obviously disruption. You can't even know how many coins you will want or be able to afford until you start buying. Either way it sounds like you should do some studying before you sink the millions that will be needed into this. Otoh if you have millions sitting around you should probably fix that problem pretty quickly.

I am offering to buy 200k BTC.

Maybe you are soliciting offers, but I don't see an offer from you. What are you offering?

MtGox only has 50k BTC for sale up to $1.3/BTC.

So let's start: who is interested to sell Bitcoins at $2/BTC? And how many?

MtGox has seen some 100k+ days.  One method is simply buying slowly from MtGox over the next few months. 400k / 90 days == 4.4k per day, something the market can absorb IMO.

But even if you double the volume, there is not going to be a huge disruption.  Yes there is a tipping point, but I wouldn't necessarily judge MtGox by the current slow period.


Agreed, though you might try some of the manual exchangers such as nanoimogold or aurumexchange.  They probably have a stock (where "stock" is a few thousand bitcoins).


vladimir, mrb and BitcoinRigs offer something vaguely similar:  You pay for Ghash/sec, and they give you zero-variance BTC payouts based on the purchased hash rate + current bitcoin network difficulty.

But this is quite expensive, and you'll reach a point of diminishing returns rather quickly, much more quickly than your goal.


The bitcoins are definitely out there to be had, as the price increases.  MtGox makes life easy and should accomplish your goal over time, but I bet you can find a fair amount by canvassing various community exchangers.

You are doing it wrong.

If you really want to buy 200k bitcoins without moving the market, you should not disclose that information. Use MtGox dark pools, take advantage of volatility, and buy your coins progressively. If you are lucky you might get 200k for less than 1$/BTC. And if you really want to post messages on the forum, then better spread FUD about the whole bitcoin thing, and predictions of an imminent crash.

OTOH if you are bluffing and trying to move prices up, then you are doing it right. :-)

Quick and easy. Lease 100 GH/s (from my company of course). The only effect on the market would be a small increase to the difficulty level. At today's difficulty, you would receive about 1240 bitcoins per day, or about 100,000 bitcoins over the next three months.

If you are serious, PM me and we can arrange a very affordable price.

That's a wrong question IMHO. If you're an investor who is looking to maximize profit you should be asking this question:
 
"If have X USD. I want to buy as much BTC as possible for this sum over course of Y months. What should I do?"

The answer is to do this trade as quietly as possible because news like this will cause short-term price spikes which gets into your profit.

Try OTC trading and dark pools. Avoid public orders.

If you really have a shitload of money hire a person who knows a lot about BTC trading and has good reputation, I guess he'll be able to arrange trade much better than an outsider would do.

I wouldn't say you need a shitload of money to do that.

For the start just buy the >50k BTC on MtGox which are all well below 2$.

As you well note, that kind of volume would be a noticeable portion of total BTC float.

By default this makes you a market-maker to some degree.

My advice, hire someone or come in behind an established player and become a market-maker and BTC exchange. That's where you can make the gains in the next phase and you will get your 200K BTC and more, back in spades imvho. E.g. buy Mt. Gox.

Thank you jgarzik for your insightful remarks. Buying up slowly on MtGox is probably the way to go.

BitcoinRigs: I would need 300 GH/s to acquire the amount I want in 2-4 months assuming no difficulty increase. More likely 500 or 1000 GH/s when taking difficulty into account. I take it you and your competitors are using high-end computer video cards. This is 1000 or 2000 of them. It would take multiple months to purchase and set up the hardware, no? Quite frankly the more I look into it, the more I prefer the simpler and less risky way of buying Bitcoins on the market.

As to whether I should be quiet or not about my purchase: quite honestly I doubt that being open about it will change anything. Half of you disbelieve me anyway.

Edit: Acquiring an exchange is thinking way ouf of the box, moa. Will think about it.

Perhaps you should consider joining the IRC discussion at #bitcoin-otc. You will get feedback from more people, and probably learn a few things.

Hmm, It's becoming kind of obvious that Bitcoin needs an investment banker.  This seems like a good opportunity.

It would make more sense to invest in producing some type of product that you can sell for Bitcoins.

I sent you a PM about how to do this if you are really wanting to.

Agreed. Buying that many coins on the open market is going to shoot the price straight through the roof. I say go for it!!! In two months when the price hits $5, I'll cash out, then a month later the price will settle back down to $1 and I'll buy back all my coins for a huge profit.

Just one hangup ... Doesn't mtgox have a $1000/day withdrawal limit? I don't see how you could get that many coins out of mtgox in 2-4 months.

IMO if a user is willing to provide full KYC info to mtgox, mtgox should permit removal of that limit.

they can't remove the limit for the reason explained here:
http://bitcointalk.org/index.php?topic=5627.0

MtGox isn't in the USA. It's in Japan.

As you can see from my participation in that thread, as well as previous ownership and operation of The Bitcoin Store, I'm well aware of FinCEN regulations.  I even linked to that FinCEN administrative ruling months ago. That does not preclude nor prevent mtgox from KYC'ing a high-dollar deposit, especially considering that the new owner and servers are both non-US.

my bad. assumed it was U.S. based.

I could sell you a few thousand at $2 per btc. I'd want bank wire or similar non-reversible payment for them of course. :)

though as others have said, unless you're in a huge huge hurry, you'd do better to accumulate them slowly on mtgox over a period of a few months.

I would NOT do MTGox. Not only does that affect the market the most, but using the funds are a pain in the butt.

I would OTC. Accumulate slowly if you can

I could probably sell you 10k, over a week's time. Of course I'd also need relatively irreversible payment.

It looks like people aren't taking this to seriously as the market has remained flat today.

Once again, thank you for all your comments. (I knew this community was full of sharp individuals.)

I have received a multitude of proposals. I apologize to those I have ignored (my time is limited and it does not make sense to work on many small deals.)

On the other hand, I have followed up with a few privately.

I have taken a decision on how to proceed. For obvious reasons I do not wish to comment on my strategy(ies). I do recognize that investing in Bitcoin at such an early stage is risky, but as a VC I am used to risk deals :-)

Price just jumped $.10. I wonder who is buying...

I'm not sure people are entirely convinced this is for real. When your opening offer is twice the market value, it makes me wonder how he ever got a half million dollars in the first place.

well, maybe he has 250k btc and needs a quarter million dollars, so he hints "there will be much selling soon, and at more than twice the current value" and bam, a lot of people start buying at whatever current market rate is so they can sell later... now all he needs is to put a dark order of 250k on 1.0 at mtgox and wait...

I don't particularly care if this is real or not -- it's just a forum thread.

But if you are buying a large amount of bitcoins, 1/6 of all bitcoins in circulation, $2/BTC is not unreasonable.

(this is 'jgarzik', posting under a new nick)

If you had someone that wanted to sell 200k outright I'd imagine you have to give them an offer like that.
I wouldn't sell 200k at market value.

I'm not accusing him or anything. It just seemed a little strange to show up with such an offer. I would spy and troll until I had a careful plan to quietly buy up the market.

I agree, not accusing him either but if I had the money to throw around I'd do like you said.
On the other hand there are people that could afford to play demolition derby with Ferrari's and could easily buy 200k  btc for the hell of it or on speculation.   

This thread got me thinking about what I'd do if I had $200k to spend on acquiring bitcoins.  If I wanted to help the bitcoin economy, the best thing would be to act as a rational market participant.  What bitcoin needs for people to be more willing to price things in terms of bitcoins and offer goods and services is some modest amount of value stability (note: that might mean measuring against gold or a basket of commodities or something else other than the dollar these days).  With a broad and deep market for bitcoins, this will happen naturally and your $200k could be a step in that direction.  If you simply set a price floor and buy when bitcoins dip below that, but don't chase the market higher, you'll help create that stability.  Once you have established the position you want, then if you also trade around that position by selling when the price rises and buying when it falls, you'll also help create this stability. 

A steadily rising price over time is not an issue, but 40% swings in the price of bitcoins in a matter days will certainly make pricing goods and services difficult and give people a bit of pause when considering using bitcoins.  If you dump buy orders on the market all at once and push the price to $2 in a matter of days, it will be inevitable that once your buying is complete, the price will collapse to close to what it was (and may even overshoot on an irrational fear created by the collapse).

While the market is moving wildly like that, there will be lots of profit to be made by speculators, the more profit taken by the speculators, the more liquid the markets, the better for the Bitcoin economy.

The wild swings in the bitcoin market is the natural way to attract speculators.  ;D

Speculators is fine, I'm not a fan of hoarders. I guess you could just call them long term speculators though  ;D

It is possible that someone who finds themselves in spot of bother and needs to move sizeable money into Bitcoins in an urgent manner due to outside circumstances. They may not have the luxury of time but they have luxury of fiat money .... for now.

""Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door." by Emma Lazarus.


Bitcoin welcomes you with open arms.

Hoarders make the price of bitcoin go up even more then speculators do.

I agree I think a lot are saving some for when BTC generation halves.

The half may send the community into panic though. idk if it will be good panic (ie: price raise mining hash rate constantly rising by a little) or bad panic (ie: massive selling, mining not profitable, price crash so even after difficulty decrease not profitable, so prices go even lower etc etc (vicious circle))

Yep, but savers make it go up the most.

There will be no panic in terms of prices when the generate reward halves.  Predictable, well-defined, future events will be already be priced into the market.  The only significant effect will be some of the least profitable miners dropping out, resulting in a reduction in difficulty.

Here we have a 200k BTC transfer on block explorer. I guess OP found a buyer.

http://blockexplorer.com/block/000000000000372744c19efaf112182bbed961a0fee0d89a6f04b4984e4f4584

Maybe someone transferred to himself :). Is that possible??

Well we all laughed at the post when he bought them.  However if he was not a troll he bought most below $1.50.  You can transfer to yourself or another client.  If I owned those I would get another computer start up another client and transfer them.  Then your bitcoin client shows 1 transaction with 200,000 BTC.

You have to hand it to him, he made a house in 7 days, but if he flooded the market with those the price would drop to $1.