Grayscale Buys 800% More Bitcoin Compared to Q1 2019

[bbc.reporter]

This news article is more positive hehehe.

In any case, would it be good to follow Gray Scale's list of altcoins that they are holding? I reckon that they might be indexing and Barry Silbert's ego might cause him to keep supporting the price of those coins hehehe.



According to Kevin Rooke, Grayscale has been buying up a lot of BTC in recent weeks.

So much even that more Bitcoin has been purchased compared to the amount of BTC generated by miners since the block reward halving.

With nearly 19,000 BTC bought by Grayscale, and under 13,000 BTC minted on the network, there is a very intriguing discrepancy.

Read in full https://nulltx.com/grayscale-buys-800-more-bitcoin-compared-to-q1-2019/

[jackg]

They seem to be covered a lot by the press and not much more by anyone else? Is there a quarterly breakdown as all I can find is articles like "grayscale buying more bitcoin than has been mined" which is an obvious clickbaity headline (I'll keep looking and update if I find one)...

[bbc.reporter]

It might be in one of these reports. I might read them later or tomorrow and post what I find hehe.

https://grayscale.co/insights/

https://grayscale.co/bitcoin-trust/

Are you speculating that it might be only fake news?

[jackg]

According to the insight link, over the past 12 months "Total Investment into Grayscale Products: $503.7 million" and their investment was around 171,000,000 so I'm not entirely sure... A lot of the investments do come from hedge funds and I don't know if I'd expect them. To spike up this quarter or last, I know a lot have been seeing problems though with the current economic state....

[gentlemand]

These stats are slowly starting to be talked about more. I'm surprised it's taken this long to sink in.

I've often maintained this halving will be the one we remember above all because of figures like this. One company, with one product has demand enough to eat more than the production rate. And there aren't really any other comparable players at the moment.

Imagine if there had been multiple ETF approvals by now. I don't believe there will be an ETF for many years to come but I expect there'll be bypasses, kludges and direct ownership from other players.

Grayscale could be geniuses, they could be goats, but it's a glimpse of a future that not enough people have bothered to think through properly.

[DeathAngel]

Limit the supply & Increase Demand = Much Higher Price

These are probably your last months to buy bitcoin relatively cheaply, I urge everybody to buy what you can afford to right now. Fiat is useless, a great depression is coming, put your money somewhere that can increase in value, not decrease/stagnate.

[exstasie]

These stats are slowly starting to be talked about more. I'm surprised it's taken this long to sink in.

I've often maintained this halving will be the one we remember above all because of figures like this. One company, with one product has demand enough to eat more than the production rate. And there aren't really any other comparable players at the moment.

Imagine if there had been multiple ETF approvals by now. I don't believe there will be an ETF for many years to come but I expect there'll be bypasses, kludges and direct ownership from other players.

Grayscale could be geniuses, they could be goats, but it's a glimpse of a future that not enough people have bothered to think through properly.

When an ETF does finally get approved, GBTC will get dropped like yesterday's news. The carry cost will be a small fraction of Grayscale's 2% fees. When that happens, this big GBTC premium over spot will probably become a discount.

At the rate volume is increasing on regulated derivatives and exchanges, I don't know if an ETF will take many years anymore.

[gentlemand]

Does anyone know what their position is on newly minted coins? Is that the only type they'll buy?

I would guess yes just for the sake of a quiet life which means everyone else in future who wants to get in on the same game will be rather less adventurous and will decree that they too only want to go after virgin coins. I hope for their sake they were buying up when production was more plentiful than it is now.

[bbc.reporter]

@gentlemand. No. Reports about Gray Scale claim that the company purchased more bitcoins than the total mined since the halving. It is assumed that some coins were purchased from other sources that are not exchanges.

[exstasie]

Does anyone know what their position is on newly minted coins? Is that the only type they'll buy?

Why would that be? At the rate they've accumulated BTC I don't think that's possible. I'm sure they just take the best deal they can get on the OTC market.

[adaseb]

Basically its bullish that they bought so much, just like all the billions of dollars that entered the Tether USDT market. However price needs to quickly advance or all this buying is eventually going to stop and price might crash.

It looks like billions have been invested in bitcoin so why aren't we at ATH yet? Obviously there is massive selling going on somewhere, not looking good. So I think shortly we should break $10.5K and break the top of the Xi pimp and then retest the June 2019 highs and quite possibly break those too. If we fail and start heading downwards then its not look good.

Great demand needs to be matched with higher prices... if we don't get this then obviously something isn't right.

[Upgrade00]

Great demand needs to be matched with higher prices... if we don't get this then obviously something isn't right.

Wouldn't this have something to do with the high trading volume, according to CMC, Bitcoin has a 24 hour volume of $31.5billion, this equals over 3 million BTC being traded. So it would take a much higher purchase than this (about 19k) to have an immediate impact on the price. The current economic crisis in many countries could also be a limiting factor.

However with the increase in demand and the sentiment of traders going to neutral, we would likely be entering a bullish range soon, and an upward in the next few weeks.

[exstasie]

Basically its bullish that they bought so much, just like all the billions of dollars that entered the Tether USDT market. However price needs to quickly advance or all this buying is eventually going to stop and price might crash.

It looks like billions have been invested in bitcoin so why aren't we at ATH yet? Obviously there is massive selling going on somewhere, not looking good. So I think shortly we should break $10.5K and break the top of the Xi pimp and then retest the June 2019 highs and quite possibly break those too. If we fail and start heading downwards then its not look good.

Great demand needs to be matched with higher prices... if we don't get this then obviously something isn't right.

I don't see it that way. We see multi-year accumulation bottoms in stock markets all the time. That's probably what is happening with BTC as well. Big accumulators like Grayscale are carving out a sideways market. Eventually once they absorb all the supply in this 2018-2020 range, price will get marked up and retail will start buying it up to and above the ATH.

No big hurry in my eyes. We could stay in this sideways range (maybe back down to $6K) until next year and still go on a bull run afterwards.

[slaman29]

Wouldn't this have something to do with the high trading volume, according to CMC, Bitcoin has a 24 hour volume of $31.5billion, this equals over 3 million BTC being traded. So it would take a much higher purchase than this (about 19k) to have an immediate impact on the price. The current economic crisis in many countries could also be a limiting factor.

However with the increase in demand and the sentiment of traders going to neutral, we would likely be entering a bullish range soon, and an upward in the next few weeks.

I totally don't see the connection. This is nothing about Grayscale buying bitcoin to manipulate the markets, this is just to show you how much 1 entity buys bitcoin. Theoretically, if everybody held and nobody sold, even if Grayscale were to mine all the bitcoins on their own it would be enough to meet the demand they have. THIS is what the title's trying to say.

[Lucius]

This is a really interesting story, not only that someone buys large quantities of BTC, but that they currently buys more than is actually produced. But the key thing is that they do it of course through OTC, and that it still does not affect the quantities available on the market, so there is no price pumping. This is logically a good thing for the buyer, and I believe that they try in every possible way to keep the price below $10k until they reach the desired quantities.

If you remember last year's pump from $4000 to almost $14k, then there was speculation that Bakkt was to blame for everything, because they were allegedly buy something around 100 000 BTC. If we were to compare these situations, then we could conclude that Grayscale should buy a lot more Bitcoin to significantly affect the price.

[bitgolden]

Well bitcoin was lower and in q1 of 2019 it wasn't doing all that well, we didn't know what is going to happen and price was around 3-4 thousand dollars, nowadays the price was high but went down because of the pandemic and became very cheap, they probably saw what everyone else saw and bought when it was cheeping hoping it would go up, they were right in the end because it did went up.

The point is not to buy that much during the q1, it is to do the same at q2 and q3 and q4 as well, will they continue to buy forever and have more bitcoins, or will they simply be doing this for more short term profits. If I see them selling bitcoin just because it went up and just taking profit and going away, that wouldn't really make the increase in buying valuable to us, but if they do end up buying more on other quarters as well that would be lovely.

[gentlemand]

This is a really interesting story, not only that someone buys large quantities of BTC, but that they currently buys more than is actually produced. But the key thing is that they do it of course through OTC, and that it still does not affect the quantities available on the market, so there is no price pumping.

The halving changes the OTC landscape too. OTC buyers who previously bought from miners will be squeezed and will have to look elsewhere. Miners who previously dumped on exchanges, and there must have been a few, will find OTC buyers seeking them out. I expect far fewer mined coins will reach the open market from now on. There's no need.

It's going to add up eventually and in a significant way. A bitcoin with a giant and urgent electricity bill attached to it is a lot easier to prise out of an owner's hands than one they bought some time ago.

[Upgrade00]

I totally don't see the connection. This is nothing about Grayscale buying bitcoin to manipulate the markets, this is just to show you how much 1 entity buys bitcoin. Theoretically, if everybody held and nobody sold, even if Grayscale were to mine all the bitcoins on their own it would be enough to meet the demand they have. THIS is what the title's trying to say.

Don't misquote my reply. I was responding to @adaseb who was asking why there has not been any increase in the price if the demand for bitcoins is increasing. I wasn't suggesting that Greyscale we're attempting to manipulate the market, nor did I comment on their intentions.

[Lucius]

The halving changes the OTC landscape too. OTC buyers who previously bought from miners will be squeezed and will have to look elsewhere. Miners who previously dumped on exchanges, and there must have been a few, will find OTC buyers seeking them out. I expect far fewer mined coins will reach the open market from now on. There's no need.

Yet perhaps this is about creating a market of different Bitcoins in terms of their values based on their past. Perhaps the Grayscale realized that not all BTCs will be the same value in the future, and that some will not actually be usable anywhere else except on the black market. It is common knowledge that Virgin Bitcoins are sold at premium prices, which definitely suits the miners who have the exclusive right to them. I read an interesting qualification (speculation) about how Bitcoin could be classified into 4 categories by price, but also by how it can actually be used.

In the future, chain analysis companies and automated services would be able to classify coins (UTXOs) in several categories:

2% of all Bitcoins: black - located on, or several hops away from a known darknet/blacklisted address. These could be spent at black markets only. Exchanges and banks would immediately freeze these coins at deposit, and open an investigation with authorities.

40% of all Bitcoins: gray - coins of untraceable origin, assumed to be mixed. Extreme KYC/KCOYC/AML vetting will be required to trade or sell these coins in the "normal" world. Legally operating merchants in some countries would need to ID you before accepting payment.

55% of all Bitcoins: white - coins with a fully traceable origin, right from the moment they were mined or bought from a KYC/AML exchange. In the distant future, owning whitelisted coins would allow nation-states to practice "legal ownership" laws by forcing miners to accept only transactions signed by a trusted (central) bank. You'd be able to reverse an illegal tx, same way you can now reverse a Visa or PayPal transaction.

3% of all Bitcoins: virgin - coins with zero transactions. These would be used as collectibles or as monetary reserves in case Bitcoin replaces physical gold.

This may be just speculation, but it makes sense if we think logically, although the idea of reverse transactions is something that most today would not accept when it comes to Bitcoin. Obviously, it will no longer be just a question of investing in BTC, but also of verifying the origin of such coins.

[gentlemand]

This may be just speculation, but it makes sense if we think logically, although the idea of reverse transactions is something that most today would not accept when it comes to Bitcoin. Obviously, it will no longer be just a question of investing in BTC, but also of verifying the origin of such coins.

If that takes hold then Bitcoin is dead meat.

I can imagine 100% radioactive coins are nothing but a liability but they already are. I can imagine totally virgin coins will have a placebo premium for some and they already do. Anything beyond those two extremes rapidly becomes totally unworkable.

I'm sure some will attempt this. They ain't getting far and everyone will truck past them.