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Author Topic: Serious question about crypto liquidity (millions).  (Read 200 times)
fathamburger
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October 23, 2017, 09:08:49 AM
 #1

Hey guys.

Serious question related to potential projects. Say a company does a $20-50 mil ICO and now needs to convert that into fiat to pay for mass hiring, commercial property, repay debt or pay out investor dividends etc. How much could the market provide in relatively hassle free way? Obviously "relatively" will be different for various people,  conversion via a mass of accounts and doing it over time so you dont tank the price.

How much could a successful post-ICO company cash out at a time? and what's the recommended strategy for capital liquidity over time?
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October 23, 2017, 09:48:57 AM
 #2

Well, we're deep into a crypto bubble so liquidity is very high right now due to all the hype. 

The volume of BTC in the last 24 hours has been about $2,000,000,000 (two billion dollars), while the volume of ETH has been about $350,000,000 (350 million dollars).  You can see the volume of the relevant currencies here.

I don't know exactly how much they could sell without affecting the market too much, but a group selling many millions of dollars worth would most likely attempt to trade OTC rather than trading on the normal crypto exchanges, so they wouldn't affect the market in the same way that they would by directly selling on an exchange.

If an ICO decided that they were going to sell directly on an exchange, they would probably do it over the course of several days simply due to the limits which exchanges impose on their customers, but it shouldn't affect the market too much for them to sell over the course of a week.

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October 23, 2017, 11:24:49 AM
 #3

thanks man. I didnt know OTC was an option.

Didnt know Ethereum was still so small at $350 million. Are you sure? there have been a number of companies raising in the $30 mil range of ETH. This would mean they are then only 10 companies or so in that realm. Seems like it should be a lot more but I'll look into it. Thanks Smiley

Anyone else have any experience actually trying to sell millions of ETH?
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October 23, 2017, 12:38:30 PM
 #4

There's nothing wrong with tanking the price though and how much could any ICO really drop the price down?
We've seen the price drop purely because of speculation due to negative news, it recovered pretty quickly.

Bitcoinity also has a handy new feature called Combined order book, that will show you how much BTC you need to buy or sell to move the price.
They use data of pretty much all big exchanges, but the feature is still in beta, so there still might be errors.

You'd need hundreds of BTC to move the price by just 1%

https://data.bitcoinity.org/markets/books/USD

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October 23, 2017, 12:45:57 PM
 #5

Didnt know Ethereum was still so small at $350 million. Are you sure?
Coinmarketcap is a pretty reliable source.  Their global Alexa ranking is about 350 and the type of basic statistics they provide leaves little room or reason for bias.

Of course this is only over 24 hours, so it's really a lot when added up over a long time.  

Also, coinmarketcap provides a price graph.  The black bars at the bottom are the volume.  Some days it has been as high as 1.5 billion, so it can change quite a lot.
Are you sure? there have been a number of companies raising in the $30 mil range of ETH. This would mean they are then only 10 companies or so in that realm.
I don't see why it would mean that. 
Anyone else have any experience actually trying to sell millions of ETH?
Try finding someone who started an ANN thread on the Altcoin Announcements board and sending them a PM.  Maybe they would know someone relevant in the projects.

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October 23, 2017, 01:07:16 PM
 #6

There's nothing wrong with tanking the price though and how much could any ICO really drop the price down?
We've seen the price drop purely because of speculation due to negative news, it recovered pretty quickly.

Bitcoinity also has a handy new feature called Combined order book, that will show you how much BTC you need to buy or sell to move the price.
They use data of pretty much all big exchanges, but the feature is still in beta, so there still might be errors.

You'd need hundreds of BTC to move the price by just 1%

https://data.bitcoinity.org/markets/books/USD
As if to change the price of bitcoin on 1% need hundreds of bitcoins how bitcoins quantities must have the speculators to change the price by 25-30%. It seems to me that sooner or later on cryptocurrency exchanges will apply the same mechanisms as in the stock market. When shares of the company plummeting them stop trading. Most bitcoin volatility hampers trade and prevents it from becoming a full-fledged currency.
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October 23, 2017, 01:35:01 PM
 #7

With the price of Bitcoin this high, I wouldn't worry about how to liquidise Bitcoin. The trade volume of Bitcoin each day has surpassed billions of dollars, a startup trying to liquidize lets say $10million wouldn't have a problem at current price since it's around 1700 Bitcoins.

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October 23, 2017, 01:45:44 PM
 #8

Three years ago, at much lower market cap and much smaller volumes, someone dumped 30,000 Bitcoins to cash out $9 million. The seller was named the Bear Whale.
Graph in source thread: he dropped the price from $320 to $300, and waited for the market to eat through his stash in a few hours. The same would happen again now if someone cashes a few millions.

Earlier this year I saw a thread including signed message from the Bear Whale to tell his story. Unfortunately I can't find it back now.

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October 23, 2017, 05:45:13 PM
 #9

Most ICO's don't have liquidity, and altcoins in general are bubbled and appear higher than they are in coinmarketcap. The tokens are stuck in the hands of few, the demand is not really there, but you go to coinmarketcap and see a coin really high, but that's not how it works. You can't simply generated 30 million coins, sell one at 1 dollar, then claim the marketcap of your coin is 30 million.

Top 10 coins should be able to take a big 7 figures selloff without dying, but high finance operations can only happen in the bitcoin blockchain, the rest of the projects are just like toys with no liquidity.
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October 23, 2017, 07:57:11 PM
 #10

Do not dump all coins at once, because it will trigger a downward spiral in the price. {not that it would influence you} .... I

would rather dump smaller quantities over a longer period over several exchanges to maximize your profits from these coins.

Why do you need to dump all these coins at once? I hope it is not a scam... cut and run ICO.  Huh

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November 22, 2017, 11:32:03 PM
 #11

Actually no, its more like these are high $$$ buys. Think lambos lol.
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