|
This is really starting to look as a large player in a short squeeze, and that is bullish.
|
|
|
|
Looks like pirate needs more money. He has lifted the referral requirement so now anyone can invest again in this BCTST. I am speculating this usually happens when business goes bad so more capital is require to remain "profitable."
He needs more BTC in order to keep shorting. He has plenty of USD. The way to squeeze a short is to simply take delivery of the asset being shorted and then sit on it. So you are saying he sold the BTC he was holding for other members and now he has a lot of USD. pirate wants BTC to drop so he can buy more BTC than he started with. But, the way to make BTC drop without Bitcoinica is to sell BTC, and since he has little or no BTC he needs more BTC to do so. That is why he is asking for more BTC from members. And you are suggesting that the way to beat pirate is to sit on our coins and keep the price stable and/or continue to buy BTC so the price goes up? Right? Interesting theory. Yes that is exactly what I am suggesting. Also if those invested with pirate withdraw and insist on settlement in BTC and not in USD this can force pirate to have to buy BTC at market. The latter could easily set off a buying panic in this market. So yes I consider pirate in a short squeeze to be very bullish for the BTC price. |
|
|
|
Looks like pirate needs more money. He has lifted the referral requirement so now anyone can invest again in this BCTST. I am speculating this usually happens when business goes bad so more capital is require to remain "profitable."
He needs more BTC in order to keep shorting. He has plenty of USD. The way to squeeze a short is to simply take delivery of the asset being shorted and then sit on it. |
|
|
|
how does pirate make money if he buys high and sells low  How does a ponzi make money?  He does not buys high sells low, he just sells at whatever. His strategy is sell high first, then buy low. This was very profitable in the great Bitcoin bear market of July 2011 - December 2011. Now the situation is different and he can end up sell low first then, buy high. |
|
|
|
|
This looks like Bit-pay Merchant Solutions (bull) just caught pirateat40 (bear) in a short squeeze. Very nicely done.
|
|
|
|
If this were pirate and he were crazy enough to pull of this stunt, it would provide a perfect opportunity for long term investors to average down and then sit back and watch the short squeeze unfold. I would very much look forward to this scenario.
Without Bitcoinica and without shorting, where would such a short squeeze come from? I think he meant that if pirate sells too low and the price rises dramatically and forces him to buy back in at a higher price...that would squeeze him because ultimately he would have less btc Yes. Less BTC than the outstanding BTC debt to pirate's lenders forcing pirate to have to buy more BTC in order to pay back his lenders further forcing up the price and increasing his losses. This is exactly how a short squeeze works. The net result is sell low first, then afterwards buy high. This failed bear strategy differs from the more commonly understood failed bull strategy of buy high first, then afterwards sell low in the order of the transactions, but not in the losses produced. |
|
|
|
If this were pirate and he were crazy enough to pull of this stunt, it would provide a perfect opportunity for long term investors to average down and then sit back and watch the short squeeze unfold. I would very much look forward to this scenario.
Without Bitcoinica and without shorting, where would such a short squeeze come from? If there is one player in a position to short Bitcoin on a massive scale its Pirate, since has has well known liabilities denominated in BTC. If he moves the corresponding asset from BTC to USD by selling the borrowed BTC for USD, he has an instant BTC short position. |
|
|
|
where did he move to is that Gox's account? probably strait to HIS Gox account to SELL EVERYTHING IN AN ALL DEVOURING HELLFIRE TO BREAK HAVOC OVER BITCOIN AND TO KILL EVERY SINGLE ONE OF US!!!!
MUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRRMUHAHAHAHAHARRHAHAHARR HARARAHARARAHHAHAHAHAARARAHARARARARRAAAAAARRRRRR............<cough> <cough> <cough> <cough> ... If this were pirate and he were crazy enough to pull of this stunt, it would provide a perfect opportunity for long term investors to average down and then sit back and watch the short squeeze unfold. I would very much look forward to this scenario. |
|
|
|
|
Bull:
Of all the alt-coins the one that I hold is Namecoin, mainly because I get it as a by product of Bitcoin mining. One scenario that could see the price of Namecoin rising sharply is the MPAA/RIAA getting SOPA 2.0 passed in the United States, as this will be seen in the market place as increasing the risk of a domain seizure in the ICANN network and generate a lot more interest in Namecoin.
Bear:
As for selling short the only one I would possibly consider is Solidcoin / Microcash.
|
|
|
|
|
NMC has dropped in BTC terms but not in USD or CAD terms where is trading above the prices in February - March of this year.
|
|
|
|
|
Yes verified on Firefox 14.01 (Ubuntu 12.04)
IE 9 (Windows 7)
GNOME Web Browser 2.22.2 (gNewSense 2.3)
|
|
|
|
Is pirateat40 really anonymous? In GNU/Linux just open a terminal and type I wonder |
|
|
|
If Pirate is using his mass of coins to hold the market down, that might be hurting the sellers and miners now, but if anything it's a reason to not sell now anyways. A good chance to pick up coins, invest them, or hold them.
Absolutely. If one does this then one gets to keep some of the "pirate plunder" as a bonus. If you don't want Pirate to manipulate the market, don't loan him the bitcoins.
True, but Pirate also did make a very valid point. Reckless over leveraged bulls can and will get burnt here. A buy and hold strategy on the other hand will deter this kind of market manipulation and provide some "pirate plunder" to keep as a bonus. I suppose the thing to keep in mine is that Pirate could decide to stop at anytime and either run with the coins or force any/every account to withdraw.
This is a huge difference here. If he forces withdrawals because the returns simply are no longer there in a bull market, then of course that is a very positive outcome. Lowering the interest rates was also a very positive first step. One other hand in the case of a Pirate default the Bitcoin community will get a taste of what a "too big to fail" bank failure is like without Ben Bernanke to print more money in order to bail said bank out. If there are these powerful clients of Pirate's that are willing to buy bitcoins at these elevated, but stable prices, it speaks out that bitcoin really is worth more than it is currently selling at.
Hope this isn't hurting the miners too bad.
It depends on what the the miners do. if they mine and hold and don't sell even to pay for power or equipment costs then they will not loose in the long run. If they mine and sell then they are getting hurt. |
|
|
|
Lets suppose the speculation is true, and the Pirate has in fact been selling large amounts of coin. Ostensibly this is to stop bubbles, but another possibility is he's gradually converting a large amount of his bitcoin holdings into fiat. One he's done that he then has the incentive to crash the bitcoin market as his Bitcoin Savings and Trust obligations are denominated in Bitcoins. For instance, suppose he's a FinCEN insider and known's that repressive anti-bitcoin measures are about to be introduced. After the crash he simply has to buy back the coins at much-reduced rates, and he gets to keep the fiat left over as his profits.
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
Why would he have that incentive? It seems that he does have an incentive to liquidate before getting the hell out of Dodge, because popping the confidence of his army of believers will probably drive the price down short term. But the incentive to cash out =! incentive to "destroy Bitcoin itself." Because he is short the market. Suppose you had 2.5 million USD and a debt denominated in Zimbabwean dollars at an interest rate of 7% a week that initially was valued at 2.5 million USD. Would you close out the position. No. You let the position ride and then pick up 500 trillion Zimbabwean dollars for say 50 USD on Ebay and use it to pay the principle and interest on your Zimbabwean dollar debt. The profit is the difference between what you sold your Zimbabwean dollars short initially 2.5 million USD and what you paid to buy back your position 50 USD. |
|
|
|
I don't think it is a matter of if he is not profiting from this endeavor, at this point. It seems to be that the concern is whether or not that this will have a lasting affect on the bitcoin economy.
I find it kind of ironic that people are going to complain about the price being held down, while people still complain about early adopter benefits.
Pirate is essentially giving everyone (including investors, clients, and potential bitcoin buyers) a chance to buy cheap coins.
Here, I think it wasn't clear enough.  This has indeed been the case for the last 7 months; however over the long term this is completely unsustainable. Something will have to give. The worst thing a pirate detractor can do is dismiss him as a ponzi or a money launderer, because this essentially limits the threat to his lenders and no one else. The reason I am sounding a warning here is because I actually trust he is telling the truth. |
|
|
|
|
The market price is, over the long term and once the short term effect of speculation is factored out, equal to the success or failure of Bitcoin. This is a direct result of the intrinsic design of Bitcoin.
As for pirate he is in a position where he can easily have a multi million USD short position on Bitcoin and consequently is in an ideal position to profit very well from a complete collapse of Bitcoin. No need for "insider" information from FinCen or anywhere else. The flip side is that a sudden very sharp increase in the market price of Bitcoin could also hurt him substantially. As for the market activity and comments that are attributed to him, this is to me indicative of a bear under a lot of pressure and possibly hurting in a bull market.
The one thing to keep in mind here is that a wounded bear is the most dangerous kind of bear.
|
|
|
|
I think I made a mistake, but I cant find it. Pirate (or whoever) sold low and bought high, so he must have lost money,BUT, I wrote: Around 44k BTC were involved over the past 4 dumpings on the 17th (34k BTC) and the 20st (10k BTC), when the price was brought down from around 8.8 to 7.8$ in a big dump. Those two combined bring the total USD aquired in those moves to ~450000 USD.*
Around 70k BTC were then bought 4 hours ago driving the price up from 8.81 USD to 9.70 USD, equalling an average price of 9.255 USD/BTC for all the USD spent. That means, around 647850 USD were sold for 70k BTC.*
In combination, those 44k BTC spent from the 17th to the 20st of July have yielded around 4500 BTC today in pure profit. He also bought additional 21500 BTC today, driving his total balance to 70k BTC. There maybe more that we just dont see yet. Lets only look at the 44k BTC mentioned. They were sold for ~450,000 USD. Then those 450,000 USD were reinvested in buying 48622.36629 BTC! at around 9,255 USD/BTC. That is a 4622.36629 BTC profit.How can this be? What am I overlooking here 44000 BTC @ 8.8 USD / BTC = 387200 USD |
|
|
|
i think his influence is much overrated.
how much money is he in charge of? somebody knows?
I think he has more than 200,000 bitcoins. Over 200,000 borrowed bitcoins. That is why the more he tries to manipulate the market with the borrowed BTC, the higher the risk of a pirate in a short squeeze. He made a comment some days ago, that he could drive the price down to 1.80 $/BTC, that is when I looked it up in the order book at the time and saw that around 1 million USD worth of BTC would have been needed to do so. IF his claim was right, he would have had by that time ( less then a week ago) around 1M USD ( 150,000 BTC) in assets.He could also do the same thing as a short with BTC borrowed at 7% a week in interest. The asset backing this is likely USD not BTC. That would be a very risky strategy, as the market would have to go down by 7 % a week in order to break even. Since when is he operating again? Because he would have incurred huge losses for the last 5,5 month. I rather think he`s riding the ponzi train all along. Done in isolation of course but not as part of an overall business strategy in a bear or flat market. I explained my pirate theory in the following post
This is very true, but only for the last 7 months. Why? What changed in the market?
Let me explain: pirateat40 is fundamentally a bear. He has however built a business that involves selling BTC to his clients who are bulls. In order to run his business he needs an inventory of BTC estimated from more than one source to be say 250000 BTC. Now like any business he needs to finance his inventory. He has two choices:
1) Borrow USD
2) Borrow BTC
(1) is cheap; however he runs the risk of a sudden drop in the BTC price leaving him with a warehouse full of worthless BTC and 2.5 million USD in debt. Let us remember we are dealing with a bear here. So instead he chooses option (2) and pays a premium rate of 7% a week to borrow BTC. He has now effectively hedged his downward risk. If the price of BTC were to drop to zero tomorrow he can repay his lenders in the now worthless BTC together with the 7% per week interest also denominated in BTC.
Now when a buyer comes along he sells the buyer BTC from his inventory and then goes into the market buys back the sold BTC. He needs to generate say 10% a week in commissions in a flat market in order to pay his lenders and make a profit. This is actually not that hard to do. In a bear market July 2011 - December 2011 he makes an additional profit because he is effectively short the market between selling his BTC from inventory and buying them back in the market in order to replenish his inventory. Now in a bull market is where the situation starts to get interesting. I suspect he can tolerate a small rise in the market, but not a sharp sudden rise so he has to use ask walls in order to moderate a rise in the market and apparently has been doing this quite well for the last 7 months. There is a serious risk here. A long term well capitalized investor who does not mind paying a small premium say 10% - 15% over market comes is out of the blue and buys out his ask wall. Now he is effectively short not only the BTC sold to the client but also the BTC from the now sold ask wall in a rising market. This is when the fun and the real risk of a short squeeze starts.
There is no need here for a ponzi or any kind of money laundering to explain this theory.
By the way I have deduced all of this from pirateat40's own comments, the comments of both his supporters and detractors and correlating these comments with the historical market behavior, as part of my own due diligence on Bitcoin.
|
|
|
|
So far it is fairly save to assum, that the 70k BTC (around 500k USD) stash that moves now and then belongs to him. The best evidence to me is the very timely correlation to his announcements on IRC and the trading followed by it, or not followed (e.g. when he said that he goes to bed and nothing happened thereafter for a day).
Around 44k BTC were involved over the past 4 dumpings on the 17th (34k BTC) and the 20st (10k BTC), when the price was brought down from around 8.8 to 7.8$ in a big dump. Those two combined bring the total USD aquired in those moves to ~450000 USD.*
Around 70k BTC were then bought 4 hours ago driving the price up from 8.81 USD to 9.70 USD, equalling an average price of 9.255 USD/BTC for all the USD spent. That means, around 647850 USD were sold for 70k BTC.*
In combination, those 44k BTC spent from the 17th to the 20st of July have yielded around 4500 BTC today in pure profit. He also bought additional 21500 BTC today, driving his total balance to 70k BTC. There maybe more that we just dont see yet.
IF this is the only player of that caliber right now, one would expect him to move the price in the other direction, once he can gain higher average prices for his sell. As soon as a 70k BTC dump would score more then the 647850 USD spent, one can expect a huge sell to happen. Especially as this player has shown signs of megalomania and expressed affection for large swings.
*Volumes taken from clarmoody.com and bitcoincharts.com
so, if we assume the Sells and the Buys were both him. His strategy is to sell low and buy high? ;p The strategy is sell high and buy low. The is why he needs to borrow BTC and not USD. We are talking about a bear here. The strategy can be very profitable in a bear market. In a bull market he can end up selling low and buying high otherwise known as a short squeeze. |
|
|
|
i think his influence is much overrated.
how much money is he in charge of? somebody knows?
I think he has more than 200,000 bitcoins. Over 200,000 borrowed bitcoins. That is why the more he tries to manipulate the market with the borrowed BTC, the higher the risk of a pirate in a short squeeze. He made a comment some days ago, that he could drive the price down to 1.80 $/BTC, that is when I looked it up in the order book at the time and saw that around 1 million USD worth of BTC would have been needed to do so. IF his claim was right, he would have had by that time ( less then a week ago) around 1M USD ( 150,000 BTC) in assets.He could also do the same thing as a short with BTC borrowed at 7% a week in interest. The asset backing this is likely USD not BTC. |
|
|
|
|
Show Posts
