Central Banks & Bitcoin - What if they start accumulating?

[GGALINff]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

[NUFCrichard]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

IF a country started accumating, unless it was a very small and poor country, the price would be driven upwards.

I don't see it happening, central banks are selling off everything they have, I don't see them buying lots of Bitcoin!

If they did buy, it would be little for them, but massive amounts for the Bitcoin world! Like 1 billion, so nothing, but a massive chunk of the market cap!

A rogue nation wouldn't be a great thing, but I imagine that authoritarian regimes won't like freely traded cryptocurrencies!

[davis196]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

Central banks need accets with a stable and predictable price.Bitcoin is still far away from this.
Bitcoin market cap is still very small and it can be easliy manipulated.
Anyway,central banks will most likely kill bitcoin,rather than accumulate.

[Herbert2020]

when you have a hypothetical situation in your mind, first you have to think about why would that situation even happen?!

is it because they want to make profit from bitcoin?
they can't bitcoin is too small for a "country" or "central banks" to even consider entering for profit. there are lots of there ways and markets for them to make 100 times more profit from.

is it to kill bitcoin?
they may be able to hit the price but there is no benefit for them to do so and bitcoin can not be killed so again there is no point in doing such a thing!

[AT101ET]

What benefit would central banks have in buying Bitcoin?
From my perspective, the only reason for them to accumulate BTC would be to reduce the market supply as they see it as 'competition'.
Using a basic supply and demand model, if supply decreases at the same level of deman, then price rises quite drastically.
If the price rises significantly enough, more people would then turn to BTC as a form of an investment thus further driving up the price.
In that case you could expect most transactions to be micro in scale.
Having been said, I very much doubt that would ever happen and you'd also need to take other price factors into account.
If a bank really wanted to see the end of BTC, they could splash out and go for a major buy out.
Having been said, that won't happen either as everyone will just start using another form of crypto so ultimately the Bank's efforts would have been in vein.

[Amph]

central bank aren't building their own bitcoin with centralized blockchain? they are not going to buy bitcoin because of this

if they are going to buy bitcoin anyway it would icrease the value dramatically depend on the amount they are investing

the only reason for them to enjoy bitcoin is to make it more centralized and have something that people already recognize instead of doing it all over again with their bad own bitcoin copy...

[Kimpoiluiseta]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

bitcoin not big effect to central bank, but central bank is big effect to volume transaction and bitcoin price
accumulation in volume transaction is still big use central bank
about affect you can see in china exchanger, bank regulation and china regulation in stop withdraw china exchanger

[rjclarke2000]

My opinion is most of us here will be very well off and potentially very rich in the future if we hodl and accumulate as much btc as we can now.

This may be a 5,10,15 year plan but be patient. There aren't enough to go around so get your btc onto a paper wallet and make copies and store them in 2 separate locations in fire proof safes.

Thank me in the years to come.

[Sniper44]

I am interested in thought on this topic,  hypotheticals:
1)  What if a small / medium / large country central bank begins accumulating

that will be a lot of good publicity for bitcoin. it shows that a big financial place in the country is investing in something that people were afraid to invest in. so that will assure them to invest in bitcoin and not only price will go to the moon but also there will be lots more adoption because of it.

2)  What are the chances of this ever happening?

i think it is pretty low considering bitcoin is a small market still and banks have other things to worry about and have lots other methods to invest and make money.

3)  How much would they buy?

as i said it won't happen but they will buy as much as they can. you can never buy a lot of bitcoin in a second that will drive price to 100000000000 dollar!
so it takes time and accumulation

4)  What would the effect on price be?

explained in 1

5)  If it is a 'rogue' nation,  would it kill bitcoin?

rogue nation?!!
why would they do this? bitcoin does not belong to one country so that another country wants to kill it.
and no, nobody can kill bitcoin. it will stay alive even if price is $1

[Qartersa]

I think the effect of this is that the prices of bitcoins will continue to rise because if the governments hold a lot of bitcoins that would mean they would be just holding it for a long time. Which means it will not move, hence the supply will result to depleting due to the stagnant bitcoins in the hands of th governments. I think it is highly unlikely that this would happen. Governments don't deal with these kinds of things.

[HanSchultz]

Whenever there is a big investment in bitcoin ,be it any source the price will rise but will the bank have the guts in investing in bitcoin as the volatility of bitcoin will be considered as a high risk high return investment and so is the reason i doubt whether the banks would risk investing in bitcoin.

[Monnt]

All your questions are leading to two stands. Approving bitcoins as a legal one or illegal. A bank will not touch bitcoins without any proper clearances from government. So basically once government unveil a stand on bitcoin, we can expect prices to skyrocket due to mass adoption and more number of new investors.

In contradiction, nothing will happen (or just a short term price fall) when a rogue nation opens its stand against bitcoins. Because bitcoin never needs a support from any government.

[gentlemand]

I can't see it ever happening under any circumstances. There's no way they'd start participating in a market that staggeringly warped. Gold evolved and distributed naturally over thousands of years.

If Kiribati decided to get in early and scoop everything up, I can't quite imagine the Federal Reserve buying them out to the tune of a few trillion.

[alyssa85]

Central banks can't do this secretly - their balance sheets are audited and published. So they basically won't do it unless bitcoin becomes a major factor in world trade. Of course if bitcoin was used a lot in world trade, it's price would already be high, before any central bank started accumulating it.

[bitbunnny]

 I don't know if this is true but I've heard rumors that dutch central bank has begun to make some kind of experiment with bitcoins and that they are buying it and testing it, even that their employees can pay with Bitcoin in the cantine. I beleive that dutch central bank is not the only one that is interested in Bitcoins and if the mass acumulation would start that would definitely influence th Bitcoin price.

[Kprawn]

A lot of money would be needed to buy all bitcoins in circulation and then you will still have people hoarding their bitcoins even if the price is

sky high. If they sit on these coins, and there are very little in circulation.... then the price will increase... but it will also have a negative side. If

too little bitcoins are in circulation, people will not be able to use it on a daily basis.... even if satoshi's become more valuable.  

[Paashaas]

It's only a matter of time when banksters starting to offer a Bitcoin wallet service to there costumers, sounds ridiculous but it will happen.

[maku]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

1. Depending on if that information would be publicly shared. If yes - it would boost bitcoin price significantly.
Central banks might be hoarding bitcoin right now as we speak and we have no idea about it.

2. Hard to tell, knowing banks and governments mixed opinion about BTC I wouldn't keep my hopes high.

3. Again, it is totally speculative subject, we don't have any information abut their supposed budget.

4. Depends on which country we are talking about here, USA or China buying BTC - it would be huge deal, Rwanda or Zimbabwe, not as much.

5. You can't buy bitcoin and sell it, hoping you will crash the market.

[Biodom]

I am interested in thought on this topic,  hypotheticals:

1)  What if a small / medium / large country central bank begins accumulating

2)  What are the chances of this ever happening?

3)  How much would they buy?

4)  What would the effect on price be?

5)  If it is a 'rogue' nation,  would it kill bitcoin?

1) some countries are already engaged in this (quite likely), BUT not through buying, but rather mining as it would attract much less attention.
2) I say the chance is 50/50, maybe move to 80/20 in a year or so.
3) they will probably not buy, but rather directly invest in mining facilities, similar what quite a few countries do with gold (China, Russia, etc)
4) since it is not official, minimal effect, although mining difficulty would increase. Observe that difficulty doubled since September 2016. indirectly, this should result in eventual price rise, but it is not a direct cause-effect.
5) Why? Nobody can buy a lot of bitcoins right now because flows are minuscule. 70% of bitcoins are already "mined" and are in circulation, so the answer is NO.

[Junko]

I wouldn't be surprised if central banks are and have been accumulating bitcoin quietly/secretly. In fact, I would be more surprised if central banks weren't buying bitcoin. As much as they are hated, they aren't stupid. Even though they are driven mad about taking over the world, I think they do understand risk/reward just as much as we do. They certainly have the means and capital.