Spending VERY Large Amounts of Bitcoin?

[OROBTC]

...

I was responding to a nearby recent thread (re possible further BTC regulation in China) and a thought occurred to me.

-- If someone wants to convert a VERY LARGE amount of BTC to cash, how would they go about it?  Are the exchanges big enough to handle, say, BTC100,000 (approx. $2.5 million)?

-- I have read a couple of news items about BTC being used to buy houses (or as an option to pay).  Would this be possible or reasonably feasible in amounts up to, say, $1,000,000 or even more?

-- If someone wanted to cash in BTC for any other assets, would this likely negatively affect BTC price (lower price because of a "Whale" selling BTC)?  

-- What would an approximate amount of BTC be to affect liquidity (my point just above)?  Say to move BTC price down 10%...?

-- Are there other assets that would be appropriate for Bitcoin Whales should they want to buy them w/ BTC?


I look forward very much to reading your comments!  

[forevernoob]

Why would you sell such a large amount at the same time?
Why not sell 50k a day instead?

[Dissonance]

the larger exchanges such as OK coin could handle that volume.  It would be dumb to do so since you would increase your costs by posting such a large sell order.  I would imagine in the future those kinds of transactions would happen OTC anyway.

[OROBTC]

Why would you sell such a large amount at the same time?
Why not sell 50k a day instead?

50k: is that $50,000 worth of BTC per day?   20 days to $1,000,000...

Well, perhaps that could work too...

Do you (or anyone else) have any idea of the capacity of the exchanges to deal large amounts of BTC?  

Would using more than one exchange allow one to convert VERY LARGE amounts?

+ 1 for reply!

[OROBTC]

the larger exchanges such as OK coin could handle that volume.  It would be dumb to do so since you would increase your costs by posting such a large sell order.  I would imagine in the future those kinds of transactions would happen OTC anyway.

Dissonance, thank you too.

How can we find out what a reasonable capacity of OK Coin or other large exchanges would be?

What if someone in China wanted to exchange BTC for US$ and not let THEIR authorities know?  (I already know that here in the USA and in Europe that people using exchanges cannot hide their activities from their governments)

[gentlemand]

Better to pre arrange something. A bitpay worker let slip that most coins they handle have buyers waiting for them. I guess someone would bite. Fuck using exchanges.

[XCASH]

I think most exchanges have limits set on the amount of fiat they will allow you to withdraw each month. If you want to withdraw more you probably have to start a company and go through all the official government paperwork needed for any company dealing with such large amounts of money. I doubt any exchanges will let Joe Bloggs withdraw millions of dollars each month to his bank with only his KYC documents to let them know where the money is going.

[tarmi]

Are the exchanges big enough to handle, say, BTC100,000 (approx. $2.5 million)?

No, better find some deep pocket buyer.

I doubt that even ok coin will let you withdraw that amount of money to your bank account.

[forevernoob]

What if someone in China wanted to exchange BTC for US$ and not let THEIR authorities know?  (I already know that here in the USA and in Europe that people using exchanges cannot hide their activities from their governments)

Are you talking about avoiding KYC regulations?
Then you can forget about exchanges. You need to find people to deal with upfront. (face to face transactions)

If it's just the Chinese government you are afraid of why not just put the money offshore?

[50cent_rapper]

...

I was responding to a nearby recent thread (re possible further BTC regulation in China) and a thought occurred to me.

-- If someone wants to convert a VERY LARGE amount of BTC to cash, how would they go about it?  Are the exchanges big enough to handle, say, BTC100,000 (approx. $2.5 million)?

-- I have read a couple of news items about BTC being used to buy houses (or as an option to pay).  Would this be possible or reasonably feasible in amounts up to, say, $1,000,000 or even more?

-- If someone wanted to cash in BTC for any other assets, would this likely negatively affect BTC price (lower price because of a "Whale" selling BTC)?  

-- What would an approximate amount of BTC be to affect liquidity (my point just above)?  Say to move BTC price down 10%...?

-- Are there other assets that would be appropriate for Bitcoin Whales should they want to buy them w/ BTC?


I look forward very much to reading your comments!  

Hey Satoshi! Don't sell all your 1 000 000 BTC premine at once! Sell in little chunks.

100 000 BTC is not 2.5 mi, but 25 mil.

[OROBTC]

...

50cent_rapper

Thank you for correcting my arithmetic error.

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Commentators above

My thinking is what seriously rich people in CHINA could do... 

I'm OK with complying with all US laws, and have no problem with KYC, etc.

[adamstgBit]

today bitstamps did >6million dollars in trades
bitfinex did >2million
btc-e >1.5million

~10million dollars in trades today so far.

but if you drop price 30% with a massive 10million dollar selloff, you'll find that you could liquidate another 10million at this new low price easily with very little further spillage. at one point you could selloff 21,000,000BTC instantly with 0 spillage, i guess this would be around 50$/BTC.

also there is the OTC markets, you could try to auction off a large amount of coins all at once, my guess is you'd get a price close to market if not above market.

heres an interesting website, you could look at after selling your million dollar home for bitcoin, https://www.bitpremier.com/, maybe you'd like to upragte to a 3million dollar home https://www.bitpremier.com/5-real-estate/1875-byron-bay-5-star-hinterland-retreat-australia

So I would guess 1-10million is the limit you could potentially sell off easily in <24hours without affecting the price much.

I think we'll see this capacity increase 10 fold in the next couple years.

[mirana12345]

It would be wise to wait for some good news if you really have to sell your bitcoin stash. The increasing demand in that case would counter your unload,
and price would stay about the same. I'm not sure up to what amount would this be plausible, but i think it's the healthiest way of dumping (for the rest of community)

[Gleb Gamow]

Go ahead and put a million dollars worth of bitcoins or fiat on an exchange and see how quickly a pseudo hack takes place.

Exchange: From the desk of Acme Exchange, we regret to inform you blah, blah, blah, but we'll do everything in our powers to make sure that nobody loses any moneys.
Client: Can we see the police report?
Exchange: Crickets.

[OROBTC]

today bitstamps did >6million dollars in trades
bitfinex did >2million
btc-e >1.5million

~10million dollars in trades today so far.

but if you drop price 30% with a massive 10million dollar selloff, you'll find that you could liquidate another 10million at this new low price easily with very little further spillage. at one point you could selloff 21,000,000BTC instantly with 0 spillage, i guess this would be around 50$/BTC.

also there is the OTC markets, you could try to auction off a large amount of coins all at once, my guess is you'd get a price close to market if not above market.

heres an interesting website, you could look at after selling your million dollar home for bitcoin, https://www.bitpremier.com/, maybe you'd like to upragte to a 3million dollar home https://www.bitpremier.com/5-real-estate/1875-byron-bay-5-star-hinterland-retreat-australia

So I would guess 1-10million is the limit you could potentially sell off easily in <24hours without affecting the price much.

I think we'll see this capacity increase 10 fold in the next couple years.

Yes, that's exactly along what I was thinking about, real estate, etc.  I will take a look at that bitpremier.com link, thanks!

So, a realistic maximum amount would be on the order of $5 million worth of BTC in a day or two and still get a decent price.

*   *   *

OK..., now how do I learn a little something about buying/selling OTC (other than localbitcoins)?  Or is localbitcoins capable of large transactions too?


EDIT:

Glen Gamow, thank you for the risk advice.

[shorena]

today bitstamps did >6million dollars in trades
bitfinex did >2million
btc-e >1.5million

~10million dollars in trades today so far.
-snip-

-snip-
So, a realistic maximum amount would be on the order of $5 million worth of BTC in a day or two and still get a decent price.
-snip-
Glen Gamow, thank you for the risk advice.

I dont know where these numbers come from, but they make no sense. Trading volume includes more than just what you need to sell. The largest orderbook I could find was bitstamp. You can use this site[1]'s "Estimate Trading" tool to play around with it yourself. If you sell 5000 BTC you would receive  1,190,290 USD @ 239/BTC average and drop the price down to 221. You might get new orders afterwards, but you might also cause a crash.

[1] https://bitcoinwisdom.com/markets/bitstamp/btcusd

[Gleb Gamow]

^^^ You welcome. Bottom line, an entity desiring to liquidate a million dollars worth of bitcoins won't be using any exchange, opting to simply picking up the phone and conducting the trade through their already trusted channels. Now, an entity obtaining mass amounts of bitcoins via nefarious means would have a more difficult time to do the same, but still not outside the realm of possibilities.

[LFC_Bitcoin]

I read an article some time ago about OTC trades (Over The Counter) where a bitcoin owner/hodler wanted to sell 1200 bitcoins in one go. He sold them all to some bitcoin company or organisation. I think he had to sell at a slight discount but got all of the cash in one lump not bit by bit on an exchange.

[unamis76]

-- I have read a couple of news items about BTC being used to buy houses (or as an option to pay).  Would this be possible or reasonably feasible in amounts up to, say, $1,000,000 or even more?

Didn't see this point discussed... This would definitely be feasible and I'd do it if I could It would be definitely be possible and probably easier than with fiat, provided you have all the funds.

[mirana12345]

I read an article some time ago about OTC trades (Over The Counter) where a bitcoin owner/hodler wanted to sell 1200 bitcoins in one go. He sold them all to some bitcoin company or organisation. I think he had to sell at a slight discount but got all of the cash in one lump not bit by bit on an exchange.

This just shows that bitcoin now has institutional investors, which is great news,if they keep the profit in bitcoins and/or trade later on to gain more.

-- I have read a couple of news items about BTC being used to buy houses (or as an option to pay).  Would this be possible or reasonably feasible in amounts up to, say, $1,000,000 or even more?

I guess that would be possible for the main purchase (commodity like a house), but the tax on such purchase (atleast here where i live) can not possibly be paid with crypto, for now that is.
Furthermore, the main question in such cases would be; what will the new owner of those bitcoins do with them, because if he is just going to dump them, they you're back to square one..