Can wallstreet really get (invest) into bitcoin?

[Mikcik]

Can wallstreet really get into bitcoin?
By wallstreet i actually mean any kind of big financial institution, hedge fund, etc. etc. simply any big financial company.
By "getting into" i mean primarily to buy (and sell bitcoins). Invest is bitcoins...

People say that yes, because they like profit, and bitcoin has i belive the highest return % in history :-).

On the other hand, bitcoin should be money, or preservation of wealth, i think it wasnt created to be an investment...

The investment function of bitcoin is really just a sideeffect (even though really big and LOVED sideeffect) and its only temporarily... The "goal" is really to get it to be used as money (advantage over fiat is no inflation, quicker transactions, less expensive fees)... Thats a goal.

Bitcoin wasnt supposed to be an investment, its just a side effect, its a temporary stage... (i think a lot of people dont realize this or forgot this in the recent time of the price spikes).

So theres a questions, will, should, and even CAN wallstreet get HUGELY into bitcoin (as an investment, money making "subject")?

Because if yes, if they got in, they will have to expect a massive adoption in the future... because if they would really consider BTC as an "quivalent" investment to any other (stocks etc.) that would mean a HUGE money stream pumped into bitcoin... Thus boosting probably the price of BTC really High... And if they would like to make profit from BTC in future, there would have to be a significant additional money incoming into btc AFTER the wallstreet got it (so they would make a profit). And  i think that only a HUGE ammounts of "normal" people with their "everyday money" would be able to generate such profit. This would probably mean that bitcoin woul really have to become its own currency, quivalently competing with national currencies, it would have to capture a part of the worlds money supply (estimated to be worldwide  worth around 70 trillion $. I think...)

[Mikcik]

So... did anybody actually did the numbers...? How much si wallstreets investments worth? How much of it would they probably put into BTc (5%, 10%)?
How much would that affect (boost) BTC price and how much additional money would have to come in afterwards (from the "common people") to create a profit in which would wallstreet be interested in the first place?

And is it even possible? Did someone really have the numbers, did the math...?

[Mikcik]

Because i dont know even if it is possible? I think wallstreet wont really ever get big in BTC... They might invest, but only a small portion.

I think, they would invest firstly a small portion (and only few companies) annonymously. Then make public that they will invest in future, additonal small players, common people would come in due to the annoucments, they (wallstreetú would take the profit and so on.

I dont think wallstreet will ever really get HUGELY interested in BTC (as some suggest in this forum), partially yes, but in any BIG way, i dont think so...

did anybody really made the numbers?

[GreenWins]

I personally see bitcoin as an investment and not a currency.
I don't think bitcoin has the reliability to be a currency.
I personally think altcoins that has major modification will fill in as currency while bitcoin will continue to be an investment.
I really don't know which altcoin will end up fulfilling that role, but I'm on the Quark coin boat. A lot of people might have different views and even think Quark is a scam, but Quark to me right now seem like the most promising one that can eventually be stable enough to be used as a currency.
I urge people to do more research and find the one that you think will be able to become a currency and not just follow blindly.
This is just my personal opinion.

[fasteddie9987]

It's Wall Streets whole ethos to make money and bitcoin could potentially be worth A LOT more money than it is already.  THere is that job advert that has been posted around for bitcoin traders so it looks pretty certain going off that.  Also, with these massive industrial size mining complexs opening like the one in Sweden (i think), there are people now with vast amounts of fiat money invested in bitcoins' increasing value and future.  

[fasteddie9987]

I personally see bitcoin as an investment and not a currency.
I don't think bitcoin has the reliability to be a currency.
I personally think altcoins that has major modification will fill in as currency while bitcoin will continue to be an investment.
I really don't know which altcoin will end up fulfilling that role, but I'm on the Quark coin boat. A lot of people might have different views and even think Quark is a scam, but Quark to me right now seem like the most promising one that can eventually be stable enough to be used as a currency.
I urge people to do more research and find the one that you think will be able to become a currency and not just follow blindly.
This is just my personal opinion.

It seems like people want to bitcoin to run before it can walk. Look at it as a complimentary currency.  Fiat currencies are currently the main model and will be needed to pay taxes and bills etc but alt currencies give the people a new opition for other purchases.  Credit card companies and banks make billions from consumers and merchants alike for simply facilitating a transaction.  Ppal does the same on web transactions. Also, the amount of personal info you give away on every credit or debit card purchase is scary.  These cards weren't designed for an internet age.  Bitcoin and co allow the people to do the same as the card companies but without the cost and without giving any personal info away when buying something.  Surely it's a no brainer.   

[Mikcik]

For example, by "wallstreet" i mean:
Banks, Hedge Fund, Pensions Fund, All kind of investment firms etc...

Lets say that these companies have around i dont know 1 Trillion dollars worth of investments (the money they want to invest somewhere (like stocks, housing, gold, commodities, etc.) (the 1 trillion number is just my number, i dont know the actual number)

They would made up their mind to invest 5% of their wealth into bitcoin (thats 50 Bilion dollars), and would expect (i dont know) a 100% appreciation of their investment in a year (because BTC had such a nice ride the past years), so they would expect to have around 100 Bilion dollars worth of BTC after a year of their initial investment.

Lets say the current BTC price is 833, the market cap is 10 000 000 000 (10 bilions dolars), there are 12 000 000 existing BTCs (that makes 10 bilions divide 12 milion coins = cca 833 dolars per coin). If 50 Bilion dolars would enter the market ( the markep cap would be 60 bilion dolars), thus driving the price of 1 BTC to 5 000 USD. And Wallstreet would like to double their investment in a year (receive additional 100% from their investment, making that 100 Bilion dollars)... So the bitcoin market cap would have to reach 110 Bilions market cap before Wallstreet would consider that it met it goal (and consider i dont know, staying or slowly cashing out)... So 110 Bilions BTC market cap would mean cca 9 200 USD per 1 BTC...

The additional 50 Bilion USD (the profit wallestreat wants to make) would have to come from other sources, like normal companies, or the regular people... Is this possible?

This was just and example, but you get the point... did anybody did this analysis (predictions) before me with REAL numbers? Is is possible for wallstreat as a whole "entity" to get "seriously" interested in BTC?

[Mikcik]

I personally see bitcoin as an investment and not a currency.
I don't think bitcoin has the reliability to be a currency.
I personally think altcoins that has major modification will fill in as currency while bitcoin will continue to be an investment.
I really don't know which altcoin will end up fulfilling that role, but I'm on the Quark coin boat. A lot of people might have different views and even think Quark is a scam, but Quark to me right now seem like the most promising one that can eventually be stable enough to be used as a currency.
I urge people to do more research and find the one that you think will be able to become a currency and not just follow blindly.
This is just my personal opinion.

Well you contradict yourself... thats a problem... if you really dont belive in BTC as a currency, than you really cant belive in BTC as an investment (at least not in the long run), because the price of BTC is mainly driven by the future expectations of it being used as a currency, other then that its really useless, even stupid gold has more use than BTC. When BTC is a not a currency and people would realize it, the price would fell a lot i belive.

But thats just sideways...

Did anybody did some real calculations with real numbers? How much is Wallstreet worth, how much could it invest in BTC, how much would it drove up the price, and how much additional income (and money) would have to be poured into it to meet the expectations of Wallstreet?

[Mikcik]

It's Wall Streets whole ethos to make money and bitcoin could potentially be worth A LOT more money than it is already.  THere is that job advert that has been posted around for bitcoin traders so it looks pretty certain going off that.  Also, with these massive industrial size mining complexs opening like the one in Sweden (i think), there are people now with vast amounts of fiat money invested in bitcoins' increasing value and future.  

I didnt know about some "massive industrial size complexes" of pcs for BTC mining... could you post a link?

[cr1776]

For example, by "wallstreet" i mean:
Banks, Hedge Fund, Pensions Fund, All kind of investment firms etc...

Lets say that these companies have around i dont know 1 Trillion dollars worth of investments (the money they want to invest somewhere (like stocks, housing, gold, commodities, etc.) (the 1 trillion number is just my number, i dont know the actual number)

They would made up their mind to invest 5% of their wealth into bitcoin (thats 50 Bilion dollars), and would expect (i dont know) a 100% appreciation of their investment in a year (because BTC had such a nice ride the past years), so they would expect to have around 100 Bilion dollars worth of BTC after a year of their initial investment.

Lets say the current BTC price is 833, the market cap is 10 000 000 000 (10 bilions dolars), there are 12 000 000 existing BTCs (that makes 10 bilions divide 12 milion coins = cca 833 dolars per coin). If 50 Bilion dolars would enter the market ( the markep cap would be 60 bilion dolars), thus driving the price of 1 BTC to 5 000 USD. And Wallstreet would like to double their investment in a year (receive additional 100% from their investment, making that 100 Bilion dollars)... So the bitcoin market cap would have to reach 110 Bilions market cap before Wallstreet would consider that it met it goal (and consider i dont know, staying or slowly cashing out)... So 110 Bilions BTC market cap would mean cca 9 200 USD per 1 BTC...

The additional 50 Bilion USD (the profit wallestreat wants to make) would have to come from other sources, like normal companies, or the regular people... Is this possible?

This was just and example, but you get the point... did anybody did this analysis (predictions) before me with REAL numbers? Is is possible for wallstreat as a whole "entity" to get "seriously" interested in BTC?

That isn't how it works in general.  If $50 Billion entered the market, the market cap would probably be nearly 10 times as much - $500 Billion - because their buying in would increase the price so much.  The way to remember it is that prices are set at the margin, eg by those who are buying and selling and most bitcoin wouldn't be sold so the demand would be immense.  

Putting $10 billion in would probably be enough to give us a $50-100 Billion market cap.

[Mikcik]

For example, by "wallstreet" i mean:
Banks, Hedge Fund, Pensions Fund, All kind of investment firms etc...

Lets say that these companies have around i dont know 1 Trillion dollars worth of investments (the money they want to invest somewhere (like stocks, housing, gold, commodities, etc.) (the 1 trillion number is just my number, i dont know the actual number)

They would made up their mind to invest 5% of their wealth into bitcoin (thats 50 Bilion dollars), and would expect (i dont know) a 100% appreciation of their investment in a year (because BTC had such a nice ride the past years), so they would expect to have around 100 Bilion dollars worth of BTC after a year of their initial investment.

Lets say the current BTC price is 833, the market cap is 10 000 000 000 (10 bilions dolars), there are 12 000 000 existing BTCs (that makes 10 bilions divide 12 milion coins = cca 833 dolars per coin). If 50 Bilion dolars would enter the market ( the markep cap would be 60 bilion dolars), thus driving the price of 1 BTC to 5 000 USD. And Wallstreet would like to double their investment in a year (receive additional 100% from their investment, making that 100 Bilion dollars)... So the bitcoin market cap would have to reach 110 Bilions market cap before Wallstreet would consider that it met it goal (and consider i dont know, staying or slowly cashing out)... So 110 Bilions BTC market cap would mean cca 9 200 USD per 1 BTC...

The additional 50 Bilion USD (the profit wallestreat wants to make) would have to come from other sources, like normal companies, or the regular people... Is this possible?

This was just and example, but you get the point... did anybody did this analysis (predictions) before me with REAL numbers? Is is possible for wallstreat as a whole "entity" to get "seriously" interested in BTC?

That isn't how it works in general.  If $50 Billion entered the market, the market cap would probably be nearly 10 times as much - $500 Billion - because their buying in would increase the price so much.  The way to remember it is that prices are set at the margin, eg by those who are buying and selling and most bitcoin wouldn't be sold so the demand would be immense.  

Putting $10 billion in would probably be enough to give us a $50-100 Billion market cap.

Really? Do you have any trading experience or a link to prove this please?

Otherwise ok, i was just mentioning the general thing i have in mind... did anybody done such calculations with some real life numbers? That would be really good to see, dont you know anybody?

[fasteddie9987]

It's Wall Streets whole ethos to make money and bitcoin could potentially be worth A LOT more money than it is already.  THere is that job advert that has been posted around for bitcoin traders so it looks pretty certain going off that.  Also, with these massive industrial size mining complexs opening like the one in Sweden (i think), there are people now with vast amounts of fiat money invested in bitcoins' increasing value and future.  

I didnt know about some "massive industrial size complexes" of pcs for BTC mining... could you post a link?

Sure,

http://www.theverge.com/2013/12/2/5165428/bitcoin-mine-in-hong-kong-uses-jelly-to-keep-cool

http://www.techspot.com/news/55111-inside-the-walls-of-a-professional-bitcoin-mining-facility-in-iceland.html

It should have said Iceland and not Sweden earlier sorry.  I'd bet that there are a lot bigger mining operations underway that would never agree to appear in a news article.

[Nagle]

Bitcoin is zero-sum, so to make money, big players have to rope in a lot of marks. Can enough suckers be found?

The Winkelvoss ETF proposal is a special case. They bought a lot of Bitcoins at a low price, but can't sell them all without crashing the price. So their ETF proposal is a way for them to exit. They're not getting into Bitcoin, they're trying to get out.

[Serge]

Bitcoin is zero-sum, so to make money, big players have to rope in a lot of marks. Can enough suckers be found?

The Winkelvoss ETF proposal is a special case. They bought a lot of Bitcoins at a low price, but can't sell them all without crashing the price. So their ETF proposal is a way for them to exit. They're not getting into Bitcoin, they're trying to get out.

hi there! few years later and bitcoin crashing from $2 now is closing to worth whole $1k of 0's

happy new year!

[jballs]

For example, by "wallstreet" i mean:
Banks, Hedge Fund, Pensions Fund, All kind of investment firms etc...

Lets say that these companies have around i dont know 1 Trillion dollars worth of investments (the money they want to invest somewhere (like stocks, housing, gold, commodities, etc.) (the 1 trillion number is just my number, i dont know the actual number)

They would made up their mind to invest 5% of their wealth into bitcoin (thats 50 Bilion dollars), and would expect (i dont know) a 100% appreciation of their investment in a year (because BTC had such a nice ride the past years), so they would expect to have around 100 Bilion dollars worth of BTC after a year of their initial investment.

Lets say the current BTC price is 833, the market cap is 10 000 000 000 (10 bilions dolars), there are 12 000 000 existing BTCs (that makes 10 bilions divide 12 milion coins = cca 833 dolars per coin). If 50 Bilion dolars would enter the market ( the markep cap would be 60 bilion dolars), thus driving the price of 1 BTC to 5 000 USD. And Wallstreet would like to double their investment in a year (receive additional 100% from their investment, making that 100 Bilion dollars)... So the bitcoin market cap would have to reach 110 Bilions market cap before Wallstreet would consider that it met it goal (and consider i dont know, staying or slowly cashing out)... So 110 Bilions BTC market cap would mean cca 9 200 USD per 1 BTC...

The additional 50 Bilion USD (the profit wallestreat wants to make) would have to come from other sources, like normal companies, or the regular people... Is this possible?

This was just and example, but you get the point... did anybody did this analysis (predictions) before me with REAL numbers? Is is possible for wallstreat as a whole "entity" to get "seriously" interested in BTC?

That isn't how it works in general.  If $50 Billion entered the market, the market cap would probably be nearly 10 times as much - $500 Billion - because their buying in would increase the price so much.  The way to remember it is that prices are set at the margin, eg by those who are buying and selling and most bitcoin wouldn't be sold so the demand would be immense.  

Putting $10 billion in would probably be enough to give us a $50-100 Billion market cap.

Really? Do you have any trading experience or a link to prove this please?

Otherwise ok, i was just mentioning the general thing i have in mind... did anybody done such calculations with some real life numbers? That would be really good to see, dont you know anybody?

Yes, and here is where it's not like that.

To make it easy just a thought experiment. Suppose I own 1 bitcoin and you want to buy one, and no other bitcoin holder anywhere want to sell to you.

I offer it on the exchange for $2,000 and you buy it.

Posted last trade price of $2,000 will base the whole valuation accordingly.

So there we just doubled the bitcoin total market cap with only $2,000 out of pocket.


Real world adjustments abound obviously but the premise is the same. It only takes a herd bias to move market cap higher or lower, given the majority of any asset holder is simply holding the asset and thus not driving price direction. $50 billion coming into bitcoin would initially drive the market cap several multiples higher. Eventually it would invert, where a small amount of exit capital would create an outsized drop. That's what volatile markets do.

 

[FalconFly]

The answer to the original question : yes

http://www.zerohedge.com/news/2013-12-31/fortess-investment-forming-bitcoin-fund

Where there's yield and sufficient market cap available, there will be Wall St. earlier or later.
Given the volatility of BTC and possible yields, any suitable form of trade vehicle in their world would open the door for BTC to become their playground.

[russokai]

It's Wall Streets whole ethos to make money and bitcoin could potentially be worth A LOT more money than it is already.  THere is that job advert that has been posted around for bitcoin traders so it looks pretty certain going off that.  Also, with these massive industrial size mining complexs opening like the one in Sweden (i think), there are people now with vast amounts of fiat money invested in bitcoins' increasing value and future.  

Yes if there is money to be made and they can do it without disrupting the market too much, they will be there.  Right now though the bitcoin market isn't big enough to get in and out easily enough.  You see that even a $1 million trade on Mt Gox moves the price quite a bit.

[guybrushthreepwood]

Can wallstreet really get into bitcoin?
By wallstreet i actually mean any kind of big financial institution, hedge fund, etc. etc. simply any big financial company.
By "getting into" i mean primarily to buy (and sell bitcoins). Invest is bitcoins...

Of course they can. Winklevi have already got a hedge fund and I'm sure there will be many more.

[fasteddie9987]

It's Wall Streets whole ethos to make money and bitcoin could potentially be worth A LOT more money than it is already.  THere is that job advert that has been posted around for bitcoin traders so it looks pretty certain going off that.  Also, with these massive industrial size mining complexs opening like the one in Sweden (i think), there are people now with vast amounts of fiat money invested in bitcoins' increasing value and future.  

Yes if there is money to be made and they can do it without disrupting the market too much, they will be there.  Right now though the bitcoin market isn't big enough to get in and out easily enough.  You see that even a $1 million trade on Mt Gox moves the price quite a bit.

Once the big players get into it there will be erratic price adjustments to reflect the larger trades but it'll be in an upwards trend.  A single bitcoin can be divided by 8 decimal places so i'd say there is plenty of scope to accommodate a rising value without people being priced out.  Bitcoin is unlike anything before it so its hard to say what will really happen if everyone gets involved, but to me the logical outcome is a huge price rise, but that's just my opinion. 

[jubalix]

a better question is can wallstreet survive bitcoin / DAC's?

imho, wall street and friends, not in their current form,

because we now have a decentralized clearing house