Merchant selling causing price to go down is "largely a myth"

[buddhamangler]

From today's Coinbase AMA

Start watching at 31:55

https://www.youtube.com/watch?v=w3OWzZSr8Nc&feature=em-uploademail

[touhonoob]

They rarely dump coins on exchanges.
Most of their coins are directly sold to Coinbase users.

[buddhamangler]

They rarely dump coins on exchanges.
Most of their coins are directly sold to Coinbase users.

Yes, exactly, however this idea seems to float around here a lot.  I regularly see people trying to make this argument.  I think if you see one of the largest bitcoin payment processors step up and say the idea is a myth, then i think it should finally settle it.

[FNG]

They rarely dump coins on exchanges.
Most of their coins are directly sold to Coinbase users.

Yes, exactly, however this idea seems to float around here a lot.  I regularly see people trying to make this argument.  I think if you see one of the largest bitcoin payment processors step up and say the idea is a myth, then i think it should finally settle it.

But it does offset a lot of the buying pressure from coinbase.

So, wouldn't really call it a myth. coins that were previously consolidated into earlier adopters hands get distributed to buyers via coinbase.  Not a bad thing but "selling" always effects the price if the sellers aren't replenishing

[buddhamangler]

But it does offset a lot of the buying pressure from coinbase.

At 31:20 he says they offset two thirds of their flow.  So he says one third of flow goes out to exchange or even "other people in the ecosystem".  Is he referring to second market or other private buyers?

[Elwar]

Those people, like me, who buy on Coinbase would have otherwise bought on the exchange...which would drive the price up.

We need people to get paid in bitcoins to counter companies converting bitcoins to fiat.

[r0ach]

We need people to get paid in bitcoins to counter companies converting bitcoins to fiat.

Unless the gas station and grocery store next to their house accepts BTC, they will still be converting to fiat.  If BTC debit cards pop up that are widely accepted, the guy might not convert to fiat and just spend BTC for gas, but then the gas station owner would convert it to fiat? lol.  How exactly do you solve the "prevent BTC from being converted to fiat" problem?

As long as the dollar exists and doesn't lose over 1% of it's value in a week, people are going to be converting to fiat over BTC because they don't feel like staring at their computer monitors with the finger on the sell button all day.  You really need wild swings in fiat value for BTC to make that leap of not being instantly converted to something more stable.  But this goes right back to square one of people that believe BTC will either be worth a lot or nothing depending on what happens with government mandated currency.