Bitcoin Forum

Hey guys,

Serious question here. Bitcoin has more awareness now than ever, but why aren't people like bill gates and warren buffet just buying all of the coins?

Do you ever wonder that? Like you would think they would be buying up all the coins, and the market cap would be tens of billions right now. Maybe they are going to war against Bitcoin?

A 51% attack controlled by opposition of Bitcoin would be fairly easy with the amount of resources these guys have.

Whats your opinion?

Why would they want BitCoins?

If their value will increase like everyone thinks, why wouldn't they? To get more wealthy

Bitcoin trading volume has reduced! Your assumption is wrong, that everyone thinks this and that. For "reach" (large volume) people is liquidity very important! If they cant sell anytime, they will not buy to much!
http://i.imm.io/1ihk5.png

But why Bitcoin volume has reduced???

Them buying the coins could drive the price up to the level that they wouldn't be able to afford.

The only feasible way they could do this would be by contacting large BTC holders and buying it directly from them, at the same time hoping none of them communicate with each other about this. But as large BTC holders are usually exchanges or businesses which manage other peoples' money, and with many people no longer having access to their wallets from 2009 or 2010, I doubt the richest would succeed in this endeavour.

Clearly, not everyone thinks that. Especially not Warren Buffett and Bill Gates.

Really, with the amount of money they have, they can't make a meaningful investment in Bitcoins without completely distorting the price. So, they could buy in and push the price to $300, $500, or $1000, and it looks great on paper. But should they want to exit and enjoy that newfound wealth, selling out huge quantities would push the price back down to $120, $80 or even $40...
 

Why aren't the same people buying all the gold, or any other thing that people typically invest in?

Not sure how this relates to the previous question but ... Whether it would be "easy" for them or not is not relevant -- the question is "what can they accomplish that would justify a spending lots and lots of resources?"

You are using MtGox chart, that's why. People having withdrawal problem since few months back.

Bitcoin is too risky for them, they rather invest in a company and sell stuff.

WRT Warren Buffet, I believe he wouldn't buy it since it's not a business.  The man has made his money by understanding and investing in businesses.

https://en.wikipedia.org/wiki/Warren_Buffett#As_a_millionaire

But I would expect various millionaires and possibly billionaires to be taking very small positions in BTC over the coming years.  I think people are still concerned it's a flash in the pan and/or a bubble.  As time goes on, and BTC continues to succeed, they will probably re-evaluate it.  The Winklevii are just the first of the elite to truly dive into BTC - there will be others.

Traditional financial instruments are backed by force of law, and more and more the 'law' is owned by wealthy people.  So when one reaches a particular level of wealth one has a lot of flexibility and safety operating in settings like investment banks, hedge funds, etc.  Witness Jon Corzine for instance.

In contrast, Bitcoin is governed mainly be hard cold mathematics which are not conducive to graft.  Secondarily, Bitcoin is also governed by a broad userbase who chooses to run or not to run various software.  At this time a wealthy person has relatively little leverage to gain an advantage aside from the flexibility in timing and market manipulation that having a large wealth buffer provides.

Going forward, as Bitcoin grows and deals with scaling problems and various more far-sighted system manipulation schemes, it is entirely possible that individuals will have a more limited role in governing things.  At that point Bitcoin may offer a more compelling value proposition to the ultra-wealthy class of individuals.  Likely it will be most valuable as a utility which augments other systems which monitor and analyze individuals on a personal level.  If we are lucky such analysis will be limited mostly to figuring out how to sell us shit.

I see others have already explained to you how 'markets' work. Next up...


... is finding out what the phrase '51% attack' actually means.

I will only sell my last coin for 1 billion USD (in today's value).

+1

very similar here:

I would actually sell my last btc for around 10 mln USD :)

You have not the slightest clue about Gates or Buffet, do you?

Maybe you would be still wanting more and more when you got billions but those two obv dont. And its very reasonable.

In fact Gates and Buffet are donating over 95% of their wealth for charitable trusts. Why should they always want more and more? Money stops being important once you pass an certain amount or do you really think that its tripple the fun to have three Ferraris instead of one?

I am pretty convinced that those two like Bitcoins.

Remember that the volume is measured in BTC. If the value goes up people could trade the same in USD and the BTC volume will go down.

Least they can't buy all the coins. Because they haven't all been mined.

So what if they do? We'll get rich because they'll be buying from us.
And not just Bitcoins, but all of these altcoins can be sold to rich people.

I don't mind. I welcome that. If any rich person would like to buy a million Bitcoins for a trillion dollars that would be the best form of stimulus package.

'cause I won't sell mine to them even they offer all their fortune, it's still undervalue.

I will sell mine only when it hit 1 trillion USD, now im richer then Warran Buffet :), well everyone is...

But we still need their support to really increase Bitcoin price, the price have being stagnant cause not enough money flowing in.

Buffet, in particular, has stated he won't buy something he does not understand. And he doesn't buy stocks of companies anymore, he just buys the company itself.

Gates, I think just wants to sell more XBoxes or something. (Maybe he'll accept bitcoins for that? I don't know.)

I agree I doubt "old money" type billionaires and millionaires will be getting into Bitcoin, but I don't see why young tech millionaires/billionaires wouldn't get into it.

I know I'm prolly going out on a limb here, but their sanity comes to mind as a good reason.

This is an impossible task; you can only buy so many coins before the price starts jumping extremely high, not to mention the people who refuse to sell their coins no matter the price.

Aside from that, it's cautiousness.

Because in order to buy bitcoins, someone needs to sell them to you.  It's called supply and demand. 

Nothing is stopping them, it's a free market.

The market is stopping them, it's a free market.

Therefore, old money like Buffet and Gates won't be buying. But new money, like the facebook twins, they already bought.

Because they are sane people and they don't need all of the Bitcoins.

Buying 90% of all existing bitcoin would drive the price well over 10k each bitcoin.  And we must not forget that each 10 minutes new bitcoins are mined.. so they could never get ALL bitcoins.  I'm pretty sure some super-rich have already think of that, evaluated the move and understood it would never worth it, even to try to destroy it.

IMO, Bitcoin are like the internet, impossible to destroy !  It's there, and will last forever, like gold, but way better ;)

What's stopping them? Basic economic logic.

Say you have 10 BTC and they offer to buy for $200 per bitcoin, so you sell 2 at that price. Well they are rich and want ALL your coins, so offer $300 and you sell 1 more. You don't want to sell too many with the price rising that fast, of course, so you always keep a chunk in reserve for the big payoff. Fine, they say, wanna play it that way? "$20,000 per coin!" You have 7 left, maybe you sell 4 of them, but not all of them because who knows where this is going? They eventually go ballistic and offer you $10 million for your last few coins. You sell just one, thinking $3 mil oughtta hold down the fort pretty well, and since they keep upping the ante why not wait until they offer a billion? Of course long before this they would run out of money. And well before that you'd start wondering if all that fiat money was even worth anything anymore, so you'd be even more incentivised to hold on to a few coins.

Reasons:
1. Lack of understanding. Professional investors do not invest in things they do not understand.

2. If I were to start using my billions to buy up all the BTC, then the price will skyrocket as I buy. Then it will crash when I stop. The rich and poor compete on a level playing field with bitcoin. 

3. They are buying a lot more coins than ever before. If Bill Gates has a million dollars worth of BTC, how would we know?

Check

ah I didn't know that they already bought. I imagine some of them have already made a lot of money off bitcoin if they purchased around the time I did when interest in it was first growing.

the real answer to the question the OP asks is this.

at any one time there are probably only about 200k bitcoins on any one market which if every one of those coins sat at the sell order price of $140 it would cost $28MILLION to buy them.. but they're not all sat at a single order price, they are scattered up the sell wal at ever increasing prices.

at the moment clarkmoody shows there are 35k bitcoins on the MTGOX exchange with a sell point from £149 to $17,933,000,000 each

so ill leave you to imagine the costs to buy just 35kbitcoin in one swoop..  

now thats just 35k bitcoins.. not the 11.8MILLION bitcoins in existance..

No millionaire or billionaire will buy bitcoins from an exchange. They'll go hunting around for a private off-exchange deal. Some people have hundreds or thousands of coins, they will start there.

I think the rich guy would prefer to invest in a company that produce ASIC instead of buying Bitcoin, they would earn even more using this strategy.

To give an analogous example; Warren Buffet famously shunned gold investment in early 2000 and plowed money into his enterprises that went on to underperformed gold over the proceeding decade. He would have been better off putting the cash into gold and not expending effort on his enterprises.

I think Bitcoin does not fit most people's mental models of how finances work. But then that comes down to a discussion of how allied with 'reality' people's mental models are.

Buying Bitcoin is the safest investment in a lot of ways but no, a rich person wouldn't touch Bitcoin yet. The ultra rich want to buy control and power over others.

Bitcoin companies aren't run in a way which would give them much control over the community yet. In the future that could change if the community depends too much on Bitcoins and does not diversify into altcoins.

Any excuse, not matter how flimsy, to pump scamcoin will do, right?

The rich are welcome to buy as much as they want. But they will have no edge over you. That is a beautiful thing about bitcoin, it's egalitarian free market nature.

They are highly discouraged from investing in anything that could compete with the $

You don't really understand the concept of risk if you're labeling bitcoin the safest investment in -any- way. It's extremely risky as an asset class.

This property defines whether something is Money or not. It is impossible to buy up all bitcoins, or all gold, or all silver in existence, using fiat currency as payment. Long before you can corner all the supply, the exchange rate has shot to the stratosphere and the purchasing medium ceases to be a valid medium of payment i.e. is destroyed.

Of course you can try to corner e.g. all Picassos, and you may end up paying very high price for the last ones, but dollar is not destroyed in the process because it is still needed to function as money.

The reason why an attempt to corner gold, silver or bitcoins will destroy the dollar, is that both the object of the corner and the medium of payment are possible to work as media of exchange. The corner sends the value of the monetary stock of the gold/silver/bitcoins so high that automatic economic adjustment mechanisms debit this from the dollar, the value of which is thus lowered. (The aggregate total purchasing power of all money in existence cannot grow unbounded.)

Well,

The winklevoss did it, so I wouldn't be surprised if at least one other does.

The thing is, once you're that rich, it doesn't seem like it'd do much harm to anybody to plop down a couple million on what might be called "risky investments" like Bitcoin, but I guess so many similar things (in terms of huge potential hype) go by each year that it must seem like just another flash in the pan for rich folk and they never bother to investigate any given phenomenon anymore. If they did, I'm almost sure more would invest in Bitcoin.

Sure, Buffett "lost out" by not buying gold. Hindsight is always 20/20 though. He did buy a ton of businesses and shares of other companies that grew their earnings at rates generally faster than the economy did, though. Which, after doing his homework, was a prediction that he felt comfortable in making. Had he just piled into gold, there would have been zero earnings and zero earnings growth. His investment returns would have been based purely on hoping that someone else would offer more for it that he paid. Knowing what we know now, yes, he could have done better going that route. But there were zero guarantees of that happening; gold had been a horrible investment for the previous 15 or so years.

Just like Bitcoin; herd mentalities rule. I was getting a lot of inquiries from friends about "what is this bitcoin thing and how do i get into it?" when bitcoin was over $200. When it slipped down the the double digits, none of them expressed any interest whatsoever. Even someone i was dealing with on localbitcoins.com had gone and frantically sold all of his in the mid $90's; I kept inquiring, and he didn't buy back in until well after the trough... not at $60 or $70, but at $110 to $120. In essense, the age old mistake of buy high sell low.

That's disjointed. What i'm trying to say is that you can look at a "hot" commodity in hindsight and say "yeah, obviously everyone should have bought that" but in the real world, most people don't act that way. They see the price of something collapse (because everyone else is selling) and jump ship. And they get excited and buy in only after it's gone up quite a ways. The consensus of the world in 2000 was that gold was still a "go nowhere" investment. And unlike buinesses that grow and create more earnings, the only way for gold (and bitcoin, for that matter) to go up is by other people offering more and more for it. Where as an investment in a company, maybe the shares will be spurned for some time, but if it's operating well, it could generate positive returns for its owners in the form of dividends until that time that the rest of the market catches on.

And here's a point. The wealthy aren't going to buy bitcoin. They'll buy businesses operating in Bitcoin, quite possibly. But they're not going to make purchases of BTC itself on the hope that someone else will buy them from them for more later on. People here can do that, sure, because their purchases don't distort the market. And it takes relatively few bitcoins to make meaningful returns for most people here. If Buffett bought 10% the bitcoins in existence and they doubled in price, AND he was able to sell them all without pushing the price far down, the results would barely move the needle of his overall portfolio. Same goes for Gates and his Foundation, and for many other wealthy investors as well.

Rich people may have some flaw in their thought models, let's call it "linear thinking". Their current modus operandi rewards them every day with position of power and luxury of life. It is impossible extremely hard to think that something created outside their sphere of influence, with a market cap of just 1 million or 1 billion, would be so crucial to them.

I know a guy who was not rich to begin with, upper middle class maximum, but he already thought so linearly so as to dismiss bitcoin when it was small. "I don't make investments to such small things." When price had gone up 10 times, he finally bought, and invested a conservative 1% of his net worth. This gave him about 1/10000 of all bitcoins, which is clearly a large interest, since it cannot be diluted.

Bitcoin price rose 1000% before the guy in the example understood that it does not matter, how much you pay for your bitcoins, what matters is how many you have. If a person is 100 times richer, and has similar thinking, and buys 100 times higher, he will have the same number of coins at the same relative investment (1% of his worth), and same relative position in bitcoin economy (1/10000 of all coins).

Most of the powercenters in bitcoin economy will be un-establishment. This is not because bitcoin is contraband, but because the mind models of the established people (with few exceptions) prevent them from purchasing bitcoin early on. In my estimation there is only about 10 people who have BTC100,000. The club is still open, but not too many admissions are available.

A vast majority of my friends fall into this category (though their reasons don't necessarily follow your outline.)  Most never got into Bitcoin, and the few who did lost at least a 10x potential by the time they made the jump.

This was a pool of people many of whom were extraordinarily intelligent, had plenty of disposable income, and who I'd spent at least some time explaining the very principle that you've elaborated on.

If somehow a herd of mouth-breathers start moving toward Bitcoin the results won't be an explosion; it'll be a detonation.

Maybe because they are in direct contact with various string pullers that assure them that Bitcoin or any other digital currency will never be allowed to break into the mainstream.

Unless there is legal clarification that states that Cryptocurrency is going to be tolerated in the long term why should they risk offending people they rely EVER SO heavily upon.

Banks / governments / the 1% they've all got one thing in common, CONTROL, why hand that over by endorsing something that removes it completely? Would you?

BTW. I really hope I'm wrong! :(

The reasons are very simple:

1) Bitcoins are an INCREDIBLY risky investment. They are extremely volatile. Just a few weeks ago when Silk Road was shut down they were down to $60. Now they are about $200. They are far too risky for traditional investors. They are completely unregulated and may even become illegal at some point.

2) The bitcoin market is way too small and way too illiquid. Their market cap is the same as a medium sized company. Large investors can't buy or sell too many bitcoins without moving the market too much. A couple thousand in profits here and there are meaningless to them. They need to be able to invest hundreds of thousands at least into bitcoin and that isn't possible right now. Neither the market, nor the exchanges can handle it.

Those two reasons alone keep the worlds richest people out of bitcoins. And it keeps most institutional investors out of bitcoins too.

It seems that bitcoin's exchange rate grows roughly in proportion to the number of holders. Therefore it makes sense to buy as soon as possible.

The correct way is to determine what number of bitcoins you want and then buy it and not sell. (Think in BTC)

The wrong way is to wait until you can invest a certain amount of dollars, and then sell after a quick double. (Think in USD)

Now, the dollar richest naturally think in USD, and apply the wrong way. This keeps the majority of bitcoins always in the hands of the smart people who think in BTC.

Just the opposite to my way of thinking.  A rich person could risk 0.01% of their wealth and have a noticeable chance of making some pretty good money.  I've never thought of my Bitcoin speculation as very likely to pay-out, but I've always put the odds at much much much higher than winning the lottery (which I've never had any inclination to try BTW.)

It is true that a better way to become unbelievably wealthy is to get a job as the CEO of a financial corporation, but that is a long-shot even to those who are well positioned.  And it takes a lot of effort.  Buying some Bitcoin takes about 5 minutes and requires no on-going effort, particularly if the initial investment is considered a sunk cost and most likely to come to naught.  Voice of experience.

In the end, I never understood why more rich people did not 'jump eeeen it' earlier on.  I would have expected more of them to have more orthogonal minds than seemed to be the case else they would not have gotten where they are.  Perhaps a lot of them did and it's just not all that apparent (though in the late 2011 crash time-frame it would have been pretty obvious in monitoring the exchanges.)

The richest people are not buying BTC because they are not done scaring the 'poor' into buying it first.

The more I see, the more I have to think that cryptos are a false flag/hope operation that will con us into going cashless.

This I doubt (but do not rule out.)  Bitcoin itself has some flaws which would make it amenable to centralization and control, but doing so would spook the userbase and popularize one of the numerous possible alternative designs which would be less susceptible.

Most likely Bitcoin was a natural follow-on to earlier efforts such as hash-cash and was released with the level of polish that the resources allowed (minimal.)  The designer(s) was/were probably independent entities who had some combination of political motivations and personal enrichment goals.  And both were probably fulfilled.

----> Gavin will visit the (fascist scum) CIA ----> https://bitcointalk.org/index.php?topic=6652.0

What does that have to do with anything?  For one, it's no big deal in and of itself, and for two, Bitcoin was fairly old by the time he did his presentation.  This in fact argues against your thesis.  I mean, if some entity had devised Bitcoin as a nefarious plot of one-world control, the CIA probably would not have had Gavin to come and give a presentation about it as a means of trying to learn something.

because they are stupid...no its because they are risk averse.  why should you speculate on greed if you've already got a healthy portion of wealth. 

Do you really believe such powerful technology (eg. asics) would have been developed otherwise ?

If BTC wasn't on their radar before gpus were integrated, it sure as hell was after. alCIAda couldn't figure it out for themselves, so they had to step in before cryptos became too big to control.

Given thier history of fabricating wars and the human suffering these maggots have imposed on our existance, its mind boggling to see how so many of you are willing to pass this off as a tea and crumpet social.

What.

You think the CIA developed ASICS?

CIA <--> AsIC!  zOMG!

The CIA may have or have not created ASICS, but they sure as hell aren't the majority thats operating them. So how does that help them control Bitcoin?

You'll be surprised with how many of their front companies you/we unknowingly deal with on an everyday basis.


Unless we conduct a census, we have no way of knowing who is really in control of the coins and hashpower.

Considering how something as big as the Manhattan project was able to remain top secret for as long as it did, anything is possible.

It was a lot easier to keep secrets back then.

if they convert there currency to bitcoins and have all of them for themselves there is no spending and thus no economy. bitcoin needs more wealth distribution which i think is why the value is high.

I'm not sure why we don't see more of this either, but that Second Market fund and also the ETF, if we see that some time, would make it more likely.  I was thinking we could see them put some of their high risk allocated investment into Bitcoin of those that follow a popular method I've seen where you divide funds up by risk among other things and assign a certain percentage to diffferent categories.

When less than 1% have the complete picture, its pretty damn easy to keep a lid on things. Everyone else is hired and on a 'need to know' basis.

In other words, they compartmentalized the craaap out of it. ;D

I do not think we are very far off from Bitcoin finding itself into the portfolios of the wealthy.

Financial planners throughout the world will soon be saying, "Your portfolio currently consists of 10% gold, 40% S&P 500, 20% in real estate, and 30% in Bitcoin."

:)