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The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

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Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#31
post #7
post #4

>Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. That's not indicative of something that's a store of value.

Is there any currency or commodity or derivative for which that statement is not true? It seems self-evident that if you own a lot of something like gold, dollars, BTC, sterling, etc. and you sell it, its value relative to what you're selling it for declines.

That's a very intelligent point, but let's think specifically of BTC's utility as a store of value.

A comparable alternative may be gold, and it would be fair to say that the gold market could be heavily impacted by a few large holders who choose to sell their holdings. However, those holders tend to be governments. Many of the top holders are fairly representative governments, so initialization of a mass gold dumping is less likely than if they were individuals or small corporate entities, I think. They would be throwing away value that belongs to a large group of citizens, and there would be trade ramifications because their trading partners would take it in the face on their own reserves.

The real reason many people don't initiate aggressive sales is that, barring a mass exodus from a collapsing financial instrument where the price is going to drop anyway, nobody wants to hurt their own mark-to-market by pushing down the prices. The only exception to this would be a fire sale where there is a mandate to liquidate a holding in order to return value to creditors.

Not only that, but price impact is often reversed by other, later trading. So even if your intention is to put selling pressure on the instrument, it may not have a very lasting impact on the price.

However, if you assume everyone else will follow suit and race to the bottom, then there's a definite first mover advantage. That's almost certainly not the case for precious metals, and generally not the case for currencies issued by stable and relatively uncorrupt governments, but it may be the case for BTC because it is new, volatile, and unsecured/unbacked.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#32
post #23

Earlier quoted context omitted.

Buying any asset pushes the price up and selling pushes the price down. It's a matter of sensitivity. The Chinese government could probably push down the price of USD a few percent by announcing a policy change today, but one guy could potentially push Bitcoin prices down significantly with a keystroke.

At great cost to himself. Dumping coins like that is not free, you pay a huge price due to slippage.

Interestingly enough, that's how Société Générale lost huge amounts of money following the discovery of Jerôme Kerviel's misbehavior. They recklessly closed their positions, shooting themselves in the foot in the process.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#33

I really enjoy investing in cryptocurrencies. However, I have a lot of doubt this is going to make the world a more fair or better place. It's going to create a wealth gap like has never been seen in first world countries.

But this time it's voluntarily. Anybody can get it at any time. I've been telling my friends and family since 2012, and only one of them invested. Those who take risks, get rewarded. You can't win if you refuse to try. Of course, there are truly poor people out there who can't have a dollar to spare, but it's mostly due to geography, corruption or war, not evil capitalists.

You know what "risk" means, right?

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#34
Large holders of bitcoin are probably believers so I don't think they would do any detrimental action to the ecosystem on purpose. Plus, if they wanted to sell BTC they would not be so stupid to do it with a large market order (because it would act against their favour), OTC market exists (or even limit orders, which don't move the market but if anything, they make it more price-stable).

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#35

Earlier quoted context omitted.

But this time it's voluntarily. Anybody can get it at any time. I've been telling my friends and family since 2012, and only one of them invested. Those who take risks, get rewarded. You can't win if you refuse to try. Of course, there are truly poor people out there who can't have a dollar to spare, but it's mostly due to geography, corruption or war, not evil capitalists.

You know what "risk" means, right?

Do you own a dictionary?

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#36
post #7
post #4

>Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. That's not indicative of something that's a store of value.

Is there any currency or commodity or derivative for which that statement is not true? It seems self-evident that if you own a lot of something like gold, dollars, BTC, sterling, etc. and you sell it, its value relative to what you're selling it for declines.

[deleted]

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#37
post #9

Earlier quoted context omitted.

Isn't the US Gov one of these whales ever since SilkRoad was seized?

These coins were mostly sold off to venture capitalist Tim Draper, for $50m: https://hacked.com/tim-draper-has-made-over-110-million-sinc... Might sound like a success story now, but at a certain point he was down 70% on his investment!

Wonder if he sold them after he made his 10% or so

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#38

I really enjoy investing in cryptocurrencies. However, I have a lot of doubt this is going to make the world a more fair or better place. It's going to create a wealth gap like has never been seen in first world countries.

But this time it's voluntarily. Anybody can get it at any time. I've been telling my friends and family since 2012, and only one of them invested. Those who take risks, get rewarded. You can't win if you refuse to try. Of course, there are truly poor people out there who can't have a dollar to spare, but it's mostly due to geography, corruption or war, not evil capitalists.

Most of these people are likely affected by capitalism to an extreme: imperialism. Much larger of an injustice than anything you listed.

The people who are most able to take risks (in the investment sense) are those with the most. An exponential growth system such as this only widens the gap, voluntary or not.

Everyone can get in, but the benefit is unequal. You need money to make money. This does not solve any equality issues on the grand scale, and only elevates a few lucky ones. To expect people to educate themselves on cryptocurrencies and understand the market when half the people in tech don't know what's going on is not reasonable.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#39

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…

Also since a large number of coins are lost the 40% number understates the size of the whales. Estimates are that 20% of coins are simply lost for good.

Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

#40
post #34

Large holders of bitcoin are probably believers so I don't think they would do any detrimental action to the ecosystem on purpose. Plus, if they wanted to sell BTC they would not be so stupid to do it with a large market order (because it would act against their favour), OTC market exists (or even limit orders, which don't move the market but if anything, they make it more price-stable).

How about their heirs?
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