I have been doing a little meta analysis of on chain data, and thinking through some things that I think we are currently watching unfold. Because I love you as my brothers I thought I would share my thoughts here. Perhaps you can tell me if you think I am crazy.
Let's just run some logic together... follow along if you will:
1. What are the chances that there are multiple entities with 10+ figures in USD they want to move into Bitcoin. In other words people who want to build a billion dollar position. ANYWHERE in the world. ANY sort of customer. Rich individuals, companies, endowments, family offices, hedge funds, countries, central banks.
The answer to the above question is not "IF", rather it is "Yes, of course. How Many?" I think at this point it is inevitable. Microstategy was unique as they did it before almost anyone else (in the herd). So they could do it somewhat openly. But not too much so. Same with Tesla.
2. How will these entities be buying their bitcoin. Logging on to TradeOgre and buying their bitcoin there?
Of course not. They will be buying privately from whales directly, or by using some sort of "institutional grade" broker. Some will buy via Greyscale, but not all. They will be working with the trading desks at the major exchanges.
Regarding this first set of points that you are making. Seems to me that it is going to be easier and easier and easier to establish Billion dollar plus positions in bitcoin, and of course, the subsequent entrants are not going to get as many bitcoin when they are coming into bitcoin at a later date as compared with those who came in at an earlier date.
Another thing is that even if someone has investible capital of $1 billion to $10 billion, they do not really need to invest all of their capital into bitcoin, and of course the could start with a prudent level of 1% to 10%, or they could become more aggressive and go above and beyond 10% and maybe even going as high as 40%.. even if they don't really need to. NOT very many folks are going to be as aggressive as Michael Saylor and surely he had been taking a risk that might well cause him to pass up status quo wealthy folks who were wealthier than him but failed / refused to get into bitcoin sufficiently early in order to get a decently sized position (or relatively large position if bitcoin ends up doing what many of us believe it is going to do)...
3. How long will they spend buying their bitcoin?
I would suggest they would spend weeks, at least, acquiring such a position. Even trading over the counter they will have an effect on the market. And they do not want to make too big waves while they do it. But on the other hand many probably believe the longer they wait, the better their entry price will be. Many, but certainly not all.
3. Are there any of the above entities that are thinking they should wait for the next bear market?
I think absolutely, yes. But most of these pros with a conservative approach are also going to hedge those bets by DCA-ing in at least somewhat in case they are wrong. And they ARE wrong in my humble opinion.
Of course we know that the longer that people wait, whether BIGGER players, normies or smaller players, the worse their situation is going to be... and sure there is some chance that we happen to be at or near the top now for this cycle, but many of us longer timers suspect that we may well currently be at the bottom (or bouncing off price for the next cycle), so even if we get some UP and down in the near future, there are not really going to be any meaningful or realistic abilities to get into BTC at these prices or lower.. so there does not seem to be any need to wait, even though there are several folks who likely believe that they are smarter (like you suggested).. so yeah.. good luck to them.. they are going to need it.
4.What would happen to dealer stock as this is going on?
This is a deeper question than at first glance. Obviously most of this sort of trading is not happening ON a retail exchange. But big whales that keep a liquid amount of bitcoin on an exchange are being reached out to by these trading desks, and the trades are happening in the dark. Then that stock of BTC will be pulled out of the liquid addresses and sent to cold storage. These bitcoin could also change hands on a ledger at the exchange, but simply remain in the cold wallet addresses of these exchanges. This means that not only would stocks at the exchanges be shrinking visibly, which they ARE, but they would also invisibly be becoming more frozen. Exchange X may have a cold wallet with 10,000 BTC in it, and 9000 of them were "for sale". But in this case we see the first number declining measurably, but the SECOND number would ALSO decline causing an invisible drop in the available float. Bittrex is still holding that billion dollars worth of BTC, but it is no longer for sale.
5. Would these entities be incentivized to manipulate the prices on retail exchanges during the time they are trading?
Yes. I do not think they all would do this. I doubt Microstrategy did it. And El Salvador is not buying so much that it is worth their effort and money. But people planning on taking a multi-billion dollar position? They would HAVE to consider setting up traders to manipulate the prices on the retail exchanges while the deals are being done. Inversely, the sellers would be incentivized to support the price as they sell their large lots. Since retail can be moved with TINY volume I just do not see how this is not happening. But I do not hink it can happen forever... Eventually the market will become so strong that it cannot be moved that easily any more. When? No clue.
6. What sort of things would we see if the above were happening?
Barts, and flash crashes/flash recoveries. Sound familiar?
For me, you are describing a big so fucking what?
We already know what some of the BIGGER players are going to do because it has already been done or attempted to be done. So what that it is happening with more capital. There is more money in bitcoin now as compared to 2017 (or even let's look at 2020 when BTC prices were $10k), so there is more capital that is needed to manipulate the BTC prices, and yeah they we be able to try to manipulate the BTC price, but they are going to be opposed by similar forces, so let them battle it out.. let the bearwhales battle with the bullwhales.. sounds like a wash to me and the same kinds of dynamics that we have already had.. some BIG moves one direction or another, some periods of consolidating and cycles.. until the cylces disappear (maybe after a few
(2-6 or more?) more, perhaps?).
7. But what about all the normal, smaller traders?[/b]
They are still here. And I would expect there is a range of them. People interested in buying a whole BTC to people wanting to ship 10s of millions in. Many of these smaller fish will be the noise floor on the retail exchanges. As you get into larger positions you will see a more savvy trader, and some may begin to look for dark pools. But most will still be trading on the exchange. They will set orders that catch the flash crashes, as well as bots that buy (or sell) aggressively under certain circumstances.
8. What about the futures markets (and leverage junkies)?
Good question. These are the cost of a truly free market. And I think leverage trading and futures can be seen influencing the markets in the form of BART type actions as well as bigger moves at expiry. Some smart degens are probably getting rich picking up gold nuggets in front of the biggest steam roller in history. But as we all know... when the corn decides to move, it can do so with extreme alacrity. Some will get murdered by the markets.
The larger the BTC market becomes the more difficult to create BARTS, but sure they might still happen from time to time.
In conclusion:
Perhaps we are on the brink of another multi year bear. Perhaps we will see another 80% drop. We DID just live through a 50% one.
oh gawd...
Let's at least get through noman's land and see what happens after that before you start predicting doom and gloom bullshit.
Sure it is possible, but anything is possible.
You are describing a situation that is quite a lot less likely.
Of course, once we get an actual blow off top for this cycle, then yeah we could get a 70% to 85% correction, but does not really seem very likely to be expecting another big correction when we just went through the 56% correction.. get fucking real..
I am not saying that another big correction could NOT take place from here, but it seems to be quite a bit less of a scenario than one that any of us should be considering highly likely at this point.Of course, if we go up to supra $250k then yeah it becomes more likely to have corrections that get to the 70% to 85% levels.
But at SOME point this cannot continue. Because at SOME point these billionaires lining up to get into the game are going to overcome what's left to sell. Yes. Everyone has a price. And I would not be surprised if some early large investors decide to divest as we see the rocket going up. Of course they will.
These kinds of things happen every cycle.. peeps sell too soon thinking that the top is in. What else is new? Just because they are BIGGER players, I doubt that the dynamics are really going to change..
Again, sure anything is possible, but we already have BTC price performance models right in front of us and a variety of patterns that we have already seen, and we surely have no real evidence that this time is going to be different (until it isn't of course)...
Maybe even some who moved in this year. When they can sell half their stake and be freerolling with the same money they initially invested they will do this. But Michael Saylor has it right. It is going to go up forever. There is coming a point where selling for anything other that the need to spend will make absolutely no sense at all. Borrow against it, or sell little bits for the big things. But otherwise why would you ever let go? It will be called a ponzi, again and again and again. Because this is the archetypal, mathematical event that ponzi schemes all pretended to be.
There are all kinds of views about bitcoin and how to attempt to treat it... some people are going to be like Saylor and others are going ot want to take profits as soon as they see a 50% UPpity candle... and all kinds of variations in between.. even amongst the rich or even amongst the WO members, we are not going to come to any kind of agreement about when to sell, how much to sell or to lend out your bitcoin and a variety of other nonsense approaches that might not exactly apply to our situation, but we do them anyhow because we see others doing it.
Already the signs of this thing getting out of control are starting to appear.
Huh? Out of control?
I doubt it.
I see that we are gravitating at the top of the range in recent days.. especially since about October 15 we have been mostly above $60k..
Sure, there are quick little DOWNity price spikes here and there .. but seems like a BIG so what? fake outs happen all the time.. zoom out a bit;. we are largely in a kind of S2F pattern, whether we want to accept it or not, so we can largely see where we have been, where we are and where we are likely to be going, even if it is not exactly guaranteed and even if there might be a few more fake outs along the way, including desperate FUD spreading/the king is dead panic assertions along the way.
These flash recoveries... the constant upward pressure. News after news after news of bank after firm, after bank integrating it. All the while the payment network is being developed in parallel to the already established store of value asset. Saylor is right that Bitcoin does not challenge the USD. The lightning network does.
Thing is people do not realize yet that the lightning network IS Bitcoin. But they will.
Over time the base layer is going to get very
crystalizedossified. We already see it.
FTFY.. the word is "ossified."
Above as I describe bitcoin is cold storage at X exchange being "frozen solid" surreptitiously as an investor buys it, but lets the exchange continue to custody it. As it stops moving on the base layer it becomes increasingly valuable. A lot of people doubt this. But like so many other aspects of bitcoin it does not make sense when measured by the standards of the day. It slows down because the hands holding it are ever stronger.
There will always be a float that is being used to transact by the whole world. But that percentage of the total will be ever decreasing. Because the incentive to HOLD it is never going away.
In my opinion the above things are simply a mathematical certainty.
And the math is going to blow our pants off.
Can't disagree with this last point, even though overall, like I already suggested in my earlier responses, I cannot really expect that you are saying anything that is not already pretty much known.. just with BIGGER players this time around.
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