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Author Topic: Bitcoin Price Suppression, is it possible?  (Read 1362 times)
niemivh
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June 17, 2011, 02:44:05 AM
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That many components of the establishment are opposed to Bitcoin is no surprise to many on this forum.  Although many methods of attacking Bitcoin have been voiced I haven't heard of a general economic attack in the form of price suppression much like in what is done with gold and precious metals.  While the exchanges lack some of the tools used in the precious metals markets (long contracts, short contracts, selling short and many others like an exchange that can change the rules on a whim) the forces wishing to suppress the price could easily buy up a few million USD worth of BTC over the period of a few days (or whatever time-frame to least impact the market on a upward trend) and then slowly sell at a loss and attempt to create a downward trend.  But why stop there?  Likewise they could help foster the growth and creation of future bubbles and try to make them as significant as possible in order to keep merchants afraid of Bitcoin.  With the additional media blitzkrieg of fear-mongering (and much of it not totally ill-founded with the existing infrastructure, client, etc) that you can have your currency easily stolen it looks like Bitcoin has a steep road ahead of it.

Cheers to all who are up for the fight.  Of which I count myself.

 Smiley

My guess is that it would only take a few million to do and much much more is spent suppressing the precious metals market to which Bitcoin is akin to.

Is there something I'm overlooking here or is this as easy as it seems for a power that can print money endlessly...?

I'll keep my politics out of your economics if you keep your economics out of my politics.

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nazgulnarsil
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June 17, 2011, 02:53:43 AM
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your method doesn't work but there is a method that does.  If someone is willing to create naked shorts AND people are willing to deal with this fraudulent person AND other people pay attention and act as if the naked short price affects the real price then in essence paper bitcoins have been created.

this has happened in the gold market with more gold receipts than can be filled.
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June 17, 2011, 03:03:30 AM
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Let them give you a way to buy cheaper bitcoins. If this were the case, why would you complain?
niemivh
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June 17, 2011, 03:09:19 AM
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It's not to say that the effect of price suppression would eventually be very expensive if the market continues to grow, but in it's embryonic state it's in now it seems that this would be feasible for an interest that had a few million they could spare for the expense.  Amirite?

I'll keep my politics out of your economics if you keep your economics out of my politics.

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nazgulnarsil
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June 17, 2011, 03:13:02 AM
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Let them give you a way to buy cheaper bitcoins. If this were the case, why would you complain?

well yes, to a certain extent.  the antidote is to hold actual bitcoins and watch their value go up when the fraud is found out.  And for anyone who knows about the fraud it's in their interest to quietly buy up a bunch of real bitcoins and then leak the info. 
nazgulnarsil
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June 17, 2011, 06:37:48 AM
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no it wouldn't.  it would make prices more accurate.
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June 17, 2011, 10:19:40 AM
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The difference is delivery. If people who bought gold took delivery they could not manipulate the price by selling paper into the market. As long as people accept unbacked or partially backed promises they can suppress. If people accept promises to deliver coins as being as good as coins themselves then manipulation is possible. There is no reason to do that though since bitcoins are so easily deliverable.

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June 17, 2011, 10:31:45 AM
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You'd only need 1-2 large sell orders (5,000BTC) pegged 0.5p above asking price, everyone who wants to sell is forced to under cut you and you have successfully suppressed the price without even selling any coins.

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