Quote:
Originally Posted by zizek
You act like it's unexpected or far fetched to thing that a scarce, deflationary resource in an unregulated market would be hoarded. Or that a single actor, or small group working with each other, couldn't have enough resources to essentially buy out the overwhelming majority of circulating Bitcoin when it was $1K or less. Bitcoin isn't decentralized. Mining costs are extremely prohibitive and required huge economies of scale to operate profitably. And that was before network difficulty more than doubled. If Bitcoin is decentralized, then so are cable companies and airlines.
If a group that hoarded Bitcoin wants to artificially inflate the price, then anyone who holds out for selling in between the then-current price and the "target" price would represent a liability from the standpoint of the hoarder. Even if you have to pay $7K for a Bitcoin knowing the price will be $15K, that's still a substantial loss. Why? Because the whole point of a price hoarding strategy is that you only sell a fraction of your hoarded supply. You can't just jack the price up and then unload your supply because of liquidity issues, particularly when you're selling something that has practically no fundamental value. But if you jack the price of Bitcoin up 1000%, even if you never touch 85% of your supply, you still profit substantially even without consideration to manipulation on the short/futures market.
If this all sounds so far fetched, then I guess De Beers is part of the illuminati, because this is almost exactly what happened with the diamond market.
None of this matters though. Even if you don't believe that this happened, and that's it somehow more realistic that an organic decentralized market swings the price of Bitcoin $500-$1K in 10 minute intervals and does nothing in between (the price of Bitcoin went up $400 in the time I spent typing this), the Mt. Gox Bitcoin is still a huge change in the amount of effectively circulating supply. 100K+ Bitcoin is a gigantic amount in an illiquid market driven entirely by speculation. That's just supply and demand, demand (speculation) is dropping as burned bagholders become immunized to the Bitcoin narrative, and supply is increasing because a huge amount is being thawed from the ice and placed into the hands of people who paid $300 or less.
What about that sounds like an investing opportunity to you? That's the real point here, it's fairly terrible news for people longing Bitcoin even if they're naive enough to not realize what's going on. However, unlike most other FUD, this is disastrous for the price in a "hypothetical" manipulated market too, unless the "hypothetical" cartel is willing to cough up $400M+ to pay off Mt. Gox creditors (they won't), the price will drop.
Okay, it seems clear that you use "liability" as a code word for possible price exposure from holding a class of assets, when "liability" means something very different in my experience. But, let's move on.
With respect to your price drop fear/prediction, however termed, basically, you predict hoarders are gonna stop hoarding and won't add to their stash from this 100K BTC going back into the market form MtGox ? You do not think that your hypothetical cartel, whoever you think they are, would already be well represented among MtGox creditors ?
I also don't get the "thawed from ice" scenario, please explain. Is that a reference to MtGox creditors' claims being liquidated in BTC ? Are you saying there has been no interim market in those claims ?
https://www.newsbtc.com/2018/06/24/m...yment-process/
(I've been watching BTC for about 6 years, coincidentally attending the first Bitcoin Foundation conference, within a week of the Mt.gox seizure. I have some idea about economics and finance, still have never tried to predict price,and even less marginal swings in price, but
think decentralized payment systems are really valuable, even if just active in the spot markets.)
Last edited by Gzesh; 06-24-2018 at 07:29 PM.