Earlier quoted context omitted.
About 25k BTC trade daily on MtGox, and that is thought to represent roughly 1/3 of USD-BTC FX transactions daily. Keep in mind thats BTC-USD trades, not "notional value spent". Apparent largest transaction was 400k bitcoins: http://www.bitcoin.org/smf/index.php?topic=1346.0 It would be difficult to transact 100k BTC with one counterparty, but could be reasonably accomplished in a few days via electronic exchanges (m…
It would be interesting to know how much of this 25k/day trade is simply a kind of steady-state speculation, including attempts to exploit arbitrage. If somebody really wanted to change 100k BTC to $, it would likely have a disastrous impact on exchange rates. The trade of US$ in the currency markets is on the order of several trillions per day. Now imagine what would happen if somebody truly wanted to exchange a few…
China effectively traded around 0.2 trillion USD for yuan and kept the USD last quarter, the impact is not that big.
More generally looking at the volume transacted does not tell you much about the depth of the market; you need to look at the order book for that. Looking at the bitcoin market there are several lots of over 25k sitting within 20 cents on each side of the bid-ask, this means it is extremely likely one could carry out a directional 100k trade with relatively small market impact if spread out over a few days.