Let's say, theoretically of course, someone had 100 BTC and wanted to make some more. 100 BTC is greater than the daily trading volumes of even some of the altcoins with the highest market caps:
| Market Cap | Volume (24h) |
Primecoin | 10,276 BTC | 98.67 BTC |
Nxt | 47,642 BTC | 74.98 BTC |
Vertcoin | 7,275 BTC | 72.08 BTC |
BitShares-PTS | 14,462 BTC | 42.66 BTC |
UltraCoin | 910 BTC | 11.18 BTC |
Digitalcoin | 1,198 BTC | 7.62 BTC |
MarineCoin | 8,637 BTC | 4.19 BTC |
* Source: Coinmarketcap.com. May be missing some exchanges but includes the major ones and most minor ones.It seems like there's a huge opportunity to manipulate these markets: buy cheap and drive up prices, then sell.
How exactly would someone do that though? Just buy up all available inventory in the morning, re-list it at slightly higher prices, keep bumping the prices up slowly through the rest of the day? Would new sellers willing to sell for less ruin the whole plan? Would people even buy at the higher prices? These markets don't seem to be based on any actual value of the coins (such as 10x earnings like with stocks), so my guess is people will buy at whatever the current price is if they think the price will rise.
Or maybe buy half of the inventory in the morning, and then keep being the buyer willing to pay the highest price, gradually driving up the price throughout the rest of the day? Then dump it all at night at the new, higher, price? Would the sell pressure from the dump reverse the price rises made during the day? Could you hold and sell gradually over the next few days, or would the price collapse as soon as you stopped buying?
What other scenarios could a whale use to profit from these markets? Is there a term for markets like these that have no intrinsic value (e.g. no 10x earnings, no well-defined usefulness like gold or hog futures)? I'm not saying all altcoins are useless and have no value (ok, I do think that applies to most of them), but there is no standard way of determining their value. Surely there's been research done into how people act in markets like these, right?