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No exact figures have been released, but based on other bidder's input, the assumptions are that his bid was well over the market price.
I'm surprised. What would be the reason to pay more than the market rate to get these coins?
>Vaurum has launched trading platforms in emerging markets, and we will be partnering with Tim to leverage the pool of 30,000 bitcoins as a liquidity source
Wow, looking at the order book of bitstamp [1] through the eyes of someone who lives in the world of market microstructure is eye opening:) There are huge holes everywhere in the order book and the liquidity at each offering level seems to be completely without reason. I just spent 20 minutes applying the sort of algorithms that'd we'd normally run on each stock to make markets in it and it can't detect any real patt…
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The bidders who announced they did not win specified bids in the $400-$500 range. Draper likely won with a higher, but still below market, bid.
There were also bidders who put in bids much lower than that, how does that mean he wasn't above market? Do you have a link to those other bidders' claims?
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No, he didn't buy it on the open market as this was essentially a private transaction between two parties. What it means is there's now someone trying to sell (instead of hoard) bitcoins worth $what_he_paid_for_it + %target_return. That will have an effect on the price, but he's not going to dump them and drive the price down because he paid a lot for them and wants to make a return (unless there's some kind of panic…
Do we know his plan to sell them? It's what I would do, but has he stated his intent?
So, it sounds like he may end up selling them to other people but only as part of a broader strategy to (and I'm guessing here) make it easier to transfer money to and from emerging markets.
If that's what he's doing (and bear in mind I'm just guessing here) it's a very ambitious goal. I used to trade emerging market equity swaps (which involved hedging FX exposure) and I've worked on international, cross-currency payments systems for one of the biggest banks in the UK. You need to know what you're doing when you're playing around in the FX space. You really need to know what you're doing when you're dealing in emerging markets currencies. I once lost $16,000 in the space of twenty seconds because I made a single, simple mistake.
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If he had bought that many on the open market it would have driven the price up by a large amount. Just go look at the current order book on Bitstamp.net one of the major exchanges. There are only about 5k coins on offer and many of those are for prices well above market. https://www.bitstamp.net/market/order_book/
That's a terrible indicator. Unless the guy was a complete moron, he wouldn't just submit an order to the market to buy 30k coins at the market price. It would be trickled over the process of a couple of weeks. By your same logic, the coins he bought are hardly worth anything because if he tried to sell them it would just crash the price. There is only about 5k worth of buy orders in the book at the moment. In fact,…
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There were also bidders who put in bids much lower than that, how does that mean he wasn't above market? Do you have a link to those other bidders' claims?
Because there is no losing bidder who claimed a near market price bid. All publicly claimed bids were far below market.
Can't reply, so I'll add it to this comment. As stated by others, the only way to purchase a large amount of bitcoins without jacking up the price is to do it in one large sum. By bidding over market price, he ensured that he would get this chunk of 30k coins without affecting the market.
Wow, looking at the order book of bitstamp [1] through the eyes of someone who lives in the world of market microstructure is eye opening:) There are huge holes everywhere in the order book and the liquidity at each offering level seems to be completely without reason. I just spent 20 minutes applying the sort of algorithms that'd we'd normally run on each stock to make markets in it and it can't detect any real patt…
Maybe there is some money to be made there, but it's hard to imagine trading with that kind of tech.
Earlier quoted context omitted.
Because there is no losing bidder who claimed a near market price bid. All publicly claimed bids were far below market.
Until you have every losing bid, you can't make these claims. Can't reply, so I'll add it to this comment. As stated by others, the only way to purchase a large amount of bitcoins without jacking up the price is to do it in one large sum. By bidding over market price, he ensured that he would get this chunk of 30k coins without affecting the market.
Earlier quoted context omitted.
Because there is no losing bidder who claimed a near market price bid. All publicly claimed bids were far below market.
Until you have every losing bid, you can't make these claims. Can't reply, so I'll add it to this comment. As stated by others, the only way to purchase a large amount of bitcoins without jacking up the price is to do it in one large sum. By bidding over market price, he ensured that he would get this chunk of 30k coins without affecting the market.
So how is this justified?