Hedgefunds, family offices and deep pockets getting in the game

[kaysersoze]

After the recent events specially the positive senate hearings a lot of investors with deep pockets are and will start buying BTC . Raul paul a very famous macro investor put out a note with strong buy recommendation and he suggest having 1-5% of total AUM in BTC as a huge option that could 10-1000x (you can google the pdf). Now these guys have multimillion dollar and billion dollar funds so for it to have any meaningful impact on their funds they probably buy > 1m  and I predict within a few months it will be very few holders that have huge positions... now these guys are traders and they will start offloading their positions as soon as their targets are met.. question is will their huge sellofs not cause big crash in BTC down the liine?

[niothor]

When you start promising 1000x returns there is where the problems start.
Bitcoinin no longer at 2$ , just do the math the amount of money need for 1000x right now , 21mils*1mil )))

[laowai80]

When you start promising 1000x returns there is where the problems start.
Bitcoinin no longer at 2$ , just do the math the amount of money need for 1000x right now , 21mils*1mil )))

Well, no.

First of all, only 12 mln. bitcoins have been mined at the moment and by 2020 which is still a long way to go only about ~18-19 mln. will be mined, about 500k-1mln of which have been lost forever.

Second of all, only a relatively small part of the existing supply is for sale on the exchanges, and some people wouldn't or couldn't sell even at much higher prices. So, much less investment money from big investors is needed to drive the prices 1000x than what you said.

[windjc]

When you start promising 1000x returns there is where the problems start.
Bitcoinin no longer at 2$ , just do the math the amount of money need for 1000x right now , 21mils*1mil )))

Well, even though Hedge funds take "higher risk" investments, I don't think any of them will be preaching 1000x returns.

I think there is a general consensus that if Bitcoin becomes a real success, a bitcoin will probably be worth $100k-$500k. So, best case scenario, they could preach 1000% return potential. But most people are THRILLED to double their money or even make 50% on their money annually.

The returns that have happened in crypto skew people's minds regarding these things.

So I think hedge fund managers are probably saying to themselves that the upside potential is 100x-500x over the next 3-10 years. And that is MORE than enough incentive to dip their toe in.

In my opinion, its going to take hedge fund and wall street money to take Bitcoin to $10k+.  

[niothor]

When you start promising 1000x returns there is where the problems start.
Bitcoinin no longer at 2$ , just do the math the amount of money need for 1000x right now , 21mils*1mil )))

Well, no.

First of all, only 12 mln. bitcoins have been mined at the moment and by 2020 which is still a long way to go only about ~18-19 mln. will be mined, about 500k-1mln of which have been lost forever.

Second of all, only a relatively small part of the existing supply is for sale on the exchanges, and some people wouldn't or couldn't sell even at much higher prices. So, much less investment money from big investors is needed to drive the prices 1000x than what you said.

so 12*1mils do you really have a clue how much money that is?
Also , lots of people will sell on 10k , lots on 100k , and those who bought on 10k will sell on 100
Let's not get overboard with how good of an investment Bitcoin is.

[laowai80]

so 12*1mils do you really have a clue how much money that is?
Also , lots of people will sell on 10k , lots on 100k , and those who bought on 10k will sell on 100
Let's not get overboard with how good of an investment Bitcoin is.

Yeah, I can multiply numbers pretty good, and when I have a problem with that, I can always use a calculator

But in this case I just don't agree with the supply number you presented. It's much less than 12 mln on the supply side now, and no matter how much price goes up, a big part of it is not for sale. It could be stored away, used directly for trade of material goods, but not for sale for fiat currencies at any price. Even with the additional mined supply over the next few years we will not get close even to 25% of the whole supply being for sale for fiat currencies.

PS: that, of course, granted that the fundamentals don't change. For example, if they somehow manage to hack bitcoin/shut it down/make it illegal worldwide/ban internet and other force majeure situations, yeah, a lot of bitcoins will be for sale for fiat

[kaysersoze]

I think the hedgies are more critical to keeping us above 10k and getting us further

My sense is that we do not need significantly broad insti support to get to 10k, but we do need them to stay there

Well that is exacly my point the problem, they will want to offload most of their positions after  5-10x from now so what happends wheb most big holders want to offload at 10k-15k price
it has to pressure the price dramatically

[notme]

If they are indeed professional traders who will sell at their predetermined targets, they will place sell orders instead of dumping into the bids.  Dumping is done to shake out weak hands so those who dumped can increase their coins.

[traderCJ]

I think the hedgies are more critical to keeping us above 10k and getting us further

My sense is that we do not need significantly broad insti support to get to 10k, but we do need them to stay there

Agreed.

[mvidetto]

More importantly once one hedge fund shows how their funds have increased by being in the cryptocurrency market, inevitably others will follow.

[laowai80]

Aren't there regulations for hedge funds that allow them to only participate in certain markets? I doubt they can be allowed to invest in cryptos.

[dasein]

Aren't there regulations for hedge funds that allow them to only participate in certain markets? I doubt they can be allowed to invest in cryptos.

"Hedge funds are made available only to certain sophisticated or accredited investors and cannot be offered or sold to the general public.[3] As such, they generally avoid direct regulatory oversight, bypass licensing requirements applicable to investment companies, and operate with greater flexibility than mutual funds and other investment funds.[4]" - http://en.wikipedia.org/wiki/Hedge_fund

[btcprice]

After the recent events specially the positive senate hearings a lot of investors with deep pockets are and will start buying BTC . Raul paul a very famous macro investor put out a note with strong buy recommendation and he suggest having 1-5% of total AUM in BTC as a huge option that could 10-1000x (you can google the pdf). Now these guys have multimillion dollar and billion dollar funds so for it to have any meaningful impact on their funds they probably buy > 1m  and I predict within a few months it will be very few holders that have huge positions... now these guys are traders and they will start offloading their positions as soon as their targets are met.. question is will their huge sellofs not cause big crash in BTC down the liine?

I wonder if Ru Paul will ever invest in bitcoin.

[kaysersoze]

After the recent events specially the positive senate hearings a lot of investors with deep pockets are and will start buying BTC . Raul paul a very famous macro investor put out a note with strong buy recommendation and he suggest having 1-5% of total AUM in BTC as a huge option that could 10-1000x (you can google the pdf). Now these guys have multimillion dollar and billion dollar funds so for it to have any meaningful impact on their funds they probably buy > 1m  and I predict within a few months it will be very few holders that have huge positions... now these guys are traders and they will start offloading their positions as soon as their targets are met.. question is will their huge sellofs not cause big crash in BTC down the liine?

I wonder if Ru Paul will ever invest in bitcoin.

of course why wouldn't he , the risk reward is perfect I think EVERYONE should have 1-10% of their assets in BTC for the potential upside

[kaysersoze]

http://www.businessinsider.com/hugh-hendry-bitcoin-could-hit-1-million-2013-12

[BitchicksHusband]

"The reason Hendry doesn't own Bitcoin is because it's not available on a regular exchange, the report said. "

Somebody needs to tell this guy about Second Market's BIT.  Can he invest in that?

[Odalv]

"The reason Hendry doesn't own Bitcoin is because it's not available on a regular exchange, the report said. "

Somebody needs to tell this guy about Second Market's BIT.  Can he invest in that?

Hendry is making smoke, he has 100 times more bitcoins than you.