pump and dump

[albert11]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

[1715235789]

1715235789

[Josepht]

It's simple: if they buy for 10 million, the price will rise enormously.

However, if they want to sell it instantly, there is no market to buy the coins.

[coinpr0n]

It would still be considered extremely high-risk and few people that rich trust Bitcoin enough to play around with $10 million. I don't know, maybe there are...

[pedrog]

The price will rise because you are the one buying...

[OROBTC]

...

pedrog and josepht have it right.

Just the act of buying a large amount will raise the price before and during the purchase.

Similarly, as the "rich guy" would try to dump his LARGE amount of BTC, he would depress the price in the selling process.

Sometimes, buying or selling LARGE AMOUNTS does not work well...

[albert11]

my example may be a little extreme but say 500 000$ ,if price rise 5% that's 25 000 profit and trader would have no problem to sell them,on localbitcoins there are lots of sell offer for up to 50 000$, trader could just open 10 trade simultaneously and sold all his bitcoins, he could even use different markets or sell cheaper than other sellers he would still make a huge profit


take for instance an altcoin with a 10 000$ market cap someone could buy 10 000$ worth of a this coins and double the market cap and value will rise alot, even if trader can't sell all the coins instantly due to lack of demand he will still be able to sell in a longer period of time and make profit wouldn't he?

[Mikestang]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

That is a very simplistic way of looking at a market, and not at all how it works in real life.  If it were that simple it would be done; the fact that it doesn't happen should answer your question before you even ask it.

[albert11]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

That is a very simplistic way of looking at a market, and not at all how it works in real life.  If it were that simple it would be done; the fact that it doesn't happen should answer your question before you even ask it.

care to elaborate?

[albert11]

...

pedrog and josepht have it right.

Just the act of buying a large amount will raise the price before and during the purchase.

Similarly, as the "rich guy" would try to dump his LARGE amount of BTC, he would depress the price in the selling process.

Sometimes, buying or selling LARGE AMOUNTS does not work well...

do you mean depress the price if he doesn't sell everything in one single trade?

how would buying a large amount raise the price before the purchase?

[OROBTC]

...

albert11

Just the fact that there would be a LARGE buyer looking to buy would get the attention of skilled traders.  This concept is one that many stock traders know about, it is one of the ideas behind High Frequency Trading ("HFT").  Just the act of starting to LOOK to buy will attract the attention of skilled traders...

*   *   *

Big players who want to make money (and who would be satisfied to make it slowly) would likely do better just to buy gradually, and then "HODL".

Once the price goes up enough (probable IMO), then sell them gradually. 

Or buy gold with the BTC. 

[albert11]

...

albert11

Just the fact that there would be a LARGE buyer looking to buy would get the attention of skilled traders.  This concept is one that many stock traders know about, it is one of the ideas behind High Frequency Trading ("HFT").  Just the act of starting to LOOK to buy will attract the attention of skilled traders...

hmm..not convinced this would increase the price before buying,anyone could act as if he was going to buy millions and be a charlatan would this increase the price? 

I think  it is a touchy subject within bitcoin community and most people don't like those who pump and dump..but i don't see any obvious flaws in doing so and making profit if done properly, there always going to be people to buy your coins even if the price rises, day trader for example and you could spread your btc in different markets and initiate a sell or a buy order simultaneously.

[gentlemand]

Only worth attempting when there are trustworthy exchanges. With the present bunch the likelihood is that they'd front run you and come out on top.

[Mikestang]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

That is a very simplistic way of looking at a market, and not at all how it works in real life.  If it were that simple it would be done; the fact that it doesn't happen should answer your question before you even ask it.

care to elaborate?

If it were as easy as the scenario you outline to make a huge fortune people would be doing it/would already have done it.  The fact that it hasn't happened and won't happen answers your question: no one does this because that's not how the system works.

[albert11]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

That is a very simplistic way of looking at a market, and not at all how it works in real life.  If it were that simple it would be done; the fact that it doesn't happen should answer your question before you even ask it.

care to elaborate?

If it were as easy as the scenario you outline to make a huge fortune people would be doing it/would already have done it.  The fact that it hasn't happened and won't happen answers your question: no one does this because that's not how the system works.

I know people don't do it and wanted to know why? and how does the system work?   

[albert11]

Only worth attempting when there are trustworthy exchanges. With the present bunch the likelihood is that they'd front run you and come out on top.

yeah good point, i wonder why no exchanges allow users to have their own private key, would be nice to see a site like blockchain.info where you can back up your key but for actual trading, do you know if any site like this exist already?

[gentlemand]

Only worth attempting when there are trustworthy exchanges. With the present bunch the likelihood is that they'd front run you and come out on top.

yeah good point, i wonder why no exchanges allow users to have their own private key, would be nice to see a site like blockchain.info where you can back up your key but for actual trading, do you know if any site like this exist already?

Not to my knowledge. I'm sure there are properly run exchanges right now but there's no way of knowing. Once Gemini and Coinbase are properly up and running they'll probably be accountable for that type of behaviour.

[thejaytiesto]

Only worth attempting when there are trustworthy exchanges. With the present bunch the likelihood is that they'd front run you and come out on top.

yeah good point, i wonder why no exchanges allow users to have their own private key, would be nice to see a site like blockchain.info where you can back up your key but for actual trading, do you know if any site like this exist already?

Not to my knowledge. I'm sure there are properly run exchanges right now but there's no way of knowing. Once Gemini and Coinbase are properly up and running they'll probably be accountable for that type of behaviour.

They better be. We can't afford a single "ups, got my shit hacked" with Gemini or Coinbase, that would be terrible.

[M28MmickT]

I know this might be a bad thing for bitcoin but i am really curious to know why don't rich people buy like 10 million $ worth of bitcoin, then the price will automatically go up and sell those bitcoin instantly? even if the price only rise by 5 % that's 500 000 $ profit in just a matter of minutes

also with altcoins that have an even lower marketcap this would work even better,so why dont we see big money players pumping and dumping?

Do some math and imagine buying up $10 million worth of bitcoin to what price would that take you?

Then add up the entire buy walls which will show you how much you could get if you cleared it out (sold in to) but doing so will kill the price in the process.

In short it will be extremely difficult to achieve what you talk about, in 'theory' that would be nice but not really possible as far as i am aware, But you could do it with a smaller amount and still make awesome money just like whales are doing every day   

[Icardi09]

There are no buying market and they ended by sell it for cheap. many people waiting for next bitcoin bubble, and ready to dump it after price skyrocketing. Because they hold expensive coin for too long.
Anyway this is risky moves, if they want to manipulate market, better in stocks

[Kprawn]

Well, it would be stupid to sell it off emmediatly. 

You would need a lot more to have a lasting impact on all of the exchanges, but it would make a difference, if you hoard them for a while and release them slowly back onto the exchanges.

The value will increase, because there are less availlable coins in circulation, but as more coins are sold on exchanges, the value will drop. {New coins are mined every day}

At one stage {final stage} of releasing it back, you would have more coins than was bought at the start, and the price might even be lower than the price you bought it for.

This is only in theory... other people might buy the new coins and could also have bought loads of other coins, and the price might skyrocket for your hoarded coins.