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Author Topic: At what price does someone corner the market?  (Read 781 times)
thezerg (OP)
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April 16, 2013, 03:26:44 AM
 #1

By "corner", I mean to hold enough to have a significant effect on the price by creating scarcity.

The marginal utility (as a value transfer network) is unaffected by the price and the fundamentals are strong.  So this seems like an obvious investment plan... buy millions of USD in coins during these dumps and then slowly sell into the scarcity you've created for long term steady profits.

total cost = active coins*corner percentage*cost per coin

Given the kind of fiat we've seen interested in the market, it seems like someone would make this move far before we hit the kind of price-per-coin that we saw just a year or 2 ago ($2-5).
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April 16, 2013, 03:31:38 AM
 #2

In order to corner the market you must have enough capital (USD GBP LTC whatever) to buy up any bitcoin that gets offered below a certain price.

So it's not a matter of holding enough BitCoin, it's a matter of holding enough cash to buy up any bitcoin that gets put up for sale.
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April 16, 2013, 05:03:33 AM
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In order to corner the market you must have enough capital (USD GBP LTC whatever) to buy up any bitcoin that gets offered below a certain price.

So it's not a matter of holding enough BitCoin, it's a matter of holding enough cash to buy up any bitcoin that gets put up for sale.

hmm... the situation is a little different then with commodities I think, because you do need some circulation because that is where bitcoin derives its fundamental value.  But yes, you'd need to allocate cash to buy the mining injection and big dumps.  Or expect that the price will top out when the growth rate = coins mined*price.  But buying up the dumps would be not so much "buying" as market making -- taking someone's dump and spreading it across time and at your higher price...

But since BTC is still inflating pretty rapidly maybe this is what's stopping someone from attempting a cornering right now...

at the same time, you have the exponential adoption curve so your worst case exit strategy is simply to wait until that catches up with your price.  Your risk is anti-bitcoin legislation, and to a lesser degree a competing coin.  You stabilize the price which is good for merchant adoption, which feeds back into the price...
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April 16, 2013, 05:04:19 AM
 #4

Corner the market and do what with it?

First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
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April 16, 2013, 05:33:44 AM
 #5

Corner the market and do what with it?

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thezerg (OP)
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April 16, 2013, 05:50:00 AM
 #6

Corner the market and do what with it?

Buy in at 50, create "artificial" scarcity to drive it to 500.  Slowly sell at 500 (or wherever) for the rest of your life as adoption increases.  Because people buying stuff, gambling, doing int'l transfers, etc don't care what the price is, only that it is stable during their (hours) window of exposure.
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