Topic: 2013-12-11 Entrepreneur:Wall Street Will Put 'Hundreds of Millions' Into Bitcoin (Read 4930 times)

The cost of trading. No exchange is zero-fee frictionless, there is order slippage and bid/ask spreads to consider.

Sure, large orders can temporarily halt an advance or pause a plunge, but the overall nature of the market doesn't change. Many people have been made poor by thinking they can take on the entire orderbook, even a smaller one like most Bitcoin exchanges.

People making up their "whale" theories about how everything is manipulated is much like the same desire to "believe" in a diety, its a mental mirage that helps them frame the chaotic nature of the world in a way that seems easier to relate to.

I don't suffer from this, because I see the market for what it is, big players and small. It is also why I know when to buy and when to sell, because my market theories aren't based on populist rumors or myths, but codified and objective observations on how markets work.

I don't mind that other people subscribe to the "whale" theory, it makes my trading just that much easier.

What cost is that?

You don't believe "whales" people manipulate markets?

That also comes at a cost, which is never accounted for in these "Manipulation" theories. And volatility is high enough due to the limited nature of the order book depths found at the typical exchange. I don't buy this theory, at all.

Manipulation can just mean "increasing volatility" - that's how you make money from trading, high volatility.

Your theory falls flat on its face when we get massive declines. If they were so interested in "manipulating" prices, why couldn't they keep it from falling?

Its a ridiculous theory I keep seeing again and again on this forum. Its an Urban Legend that will never die, apparently.

They will do things only if they can make the company money and can get a bonus at the end of the year or trade in their own account. It can be done, if they short Bitcoins, but then they need a counter party to borrow Bitcoins from.

These early adopters are already the manipulators, its not future tense. Be interesting to see them battle with Wall St

Early adopters hold astronomical amount of bitcoins relative to the current supply and ultimate end supply of 21million. This large holding can make them essentially the market manipulators, forget wall street. This is going to be some real food for thought for wall street to enter/become part of a market that THEY can't be the manipulators of...

Good plan.

This is all still presuming Wall St does pump "hundreds of millions" into bitcoin. I'll believe when I see the price going past $2000

It's still tricky to trade against the most successful forex traders, at least they will trade crash the cryptocurrencies without ending up in a federal prison as a Bernie Madoff

There are parasites in every system, unfortunately. For Bitcoin it was Satoshi Dice, and now the inquisitive blood-funnels of Disastercoin making inroads.

For Wall Street, there will be some firms that sell products based on Bitcoin that are skewed massively in favor of the "house". People won't know better at first, because they'll be focusing on the exchanges value - or worse yet - if the Wall Street firms make up their own "weighted" index to rip people off, and the average retail consumer just jumps in to get the next "hot idea" without much research.

Look back at the Facebook IPO - most people were buying into that oversubscribed failure because of name recognition alone, not because they did their due diligence themselves. Hell, most people don't even read the prospectus anymore, they just want quick bucks, and they want it NOW.

So sure, there will be some high-profile products that will burn retail customers, but that's just the general nature of Wall Street - they need the "greater fool" to make their sky-high bonuses and extravagant lifestyles possible. Hopefully though, that period will be brief, and people will eventually realize that trading a piece of paper based on Bitcoin isn't the same as having the "real thing".

Then we'll see some disintermediation going on that will make all the Wall Street parasites gnash their teeth and rue the day they tried to run their shell game with Bitcoin.

Since most of them run away with all the money , you can't end up worse than this can't you?

But the higher the overall value of bitcoin, the more infrastructure will naturally be built anyway. Venture capital money doesn't come in by accident. It started appearing when the value of bitcoin started increasing dramatically about 12 months ago.

IMHO the hundreds of millions would be better used to increase the infrastructure around bitcoin.
For example, payment systems (paypal/bitpay/Zipzap) and exchanges (derivatives/bitcoin bank not just wallet) rather than just a simple buy of bitcoins.
The bigger the infrastructure, the more useful bitcoin becomes, increasing the intrinsic value and allowing more people to use bitcoin more effectively.
Price will follow from there.
Good news for sure.

They couldn't because there is sufficient people that believe in the "value" of bitcoin that if coins became available at $100 or $10 they would disappear before you could blink and the price would go straight back up

If the price goes to that sort of level then "the rest of us" (particularly miners etc) get in on the action. I wouldn't be worried about hundreds of millions of dollars coming into the market. Manipulation has happened since day 1 with bitcoins, same as any other trading market, if people are going to manipulate at these sorts of levels, good luck to them. I'll cash out a coin a day

i think they should stage a big pump adn dump from  these level to 1800/1600, then back to 560. Nice way to make all newbies and a lot of veterans sell and to load a lot of coins.

No, he said before that when the fund initially launched they were hoping to get to $10m by the end of the year; they surpassed that within a few weeks, much to their surprise.

+1
I think it will be a wild ride. My strategy is diversifying my assets at certain benchmarks. So if i hit a million, I take out $100k and buy real estate or gold, something.   

I am sure that Wall Street will do a good job of pumping up the price before "crashing."  Hence why it is probably wise to have some sort of plan on cashing some coin out along the way.

I am all for holding long term, but with Big Money involved we need to be wise enough to expect some of their games for sure. 

All that said, now is still a great time to buy! 

All this is why China does not want it's banks speculating on bitcoin. remember that when banks speculate they do it with other peoples money. When there is a crash and they are not properly hedged you may be the one holding the bag.

no, it will depend on what they think they can achieve. Bitccoin has a fragile demand, they will shake the tree with a lot of strenght, big crashes and volatility coming. That should deifnitely retard the adoption.

That's a pretty good point!  Didn't think of that somehow

Why in the world would they want to do that?  If the price was manipulated that low then everyone would lose their trust in BTC.  Do people on Wall Street really want to see the market totally crash?  Sure they want to manipulate it a bit to make some profits but in reality they would never want to cause it to crash to those levels.

Wall street has the smartest people on earth working at those companies.  I know it's hard to believe given how stupid they have behaved at times.. but they hire the absolute top from places like MIT and Harvard.

It's hard to think that we could even imagine the schemes they might cook up (good or bad schemes I guess).

But overall speaking I'm betting it's a good thing ($/BTC -wise) the more wall street gets involved.
And like another said above, it's necessary for BTC to advance for it to get widespread and common-place investment options.
Let's face it - not that many average Joes are going to be interested in holding a chunk of their investment in some online thing called a wallet or some 'paper money' thing that they have to encrypt and store offline for max security..
They'll prefer someone else to worry about all that and just offer them an insured investment option (i.e. if you buy the Bitcoin fund from the Winkelvosses and they get hacked for a few BTC, their investors can feel secure... they can sue them if they want even, etc. etc. etc.  May not totally safe but they'll feel safer doing it that way).

Unless they manipulate it to $100.. or $10... or $1

We should already be getting used to it by now anyways.  

I suppose the price will definitely be manilpulated, but what will the price be?  Will it be manipulated from $10,000 down to $8,000 or $100,000 to $75,000?  I think those of us that have invested now won't really care too much then.

LOL i couldn't agree more.

Exactly.  Prices are set at the margin. 

At about 3600 new bitcoins per day (6*24 * 25) at ~$1000 per bitcoin that is $3.6 million of new supply per day IF all miners sell it all (unlikely in the extreme).  At hundreds of millions that is all of the supply for maybe 3 months, even spread out over a full year, that is a huge percentage of any new supply.  This is  assuming the price doesn't change which is also very unlikely.

If this is ends up being accurate, it will be big news.

Hundreds of millions of dollars of liquidity pumped into the main exchanges would have a huge impact on price. Don't forget the price at exchanges is *only* the price of people buying and selling bitcoins. A tiny proportion of the 12M bitcoins in circulation.

Fidelity has just begun offering IRA investment in Second Market's fund (as of today).

Word on the street is that JP Morgan already has plans to package 'sub-prime' red/black-listed bitcoins into lucractive derivatives.  

 

if advancement of bitcoin is desired it is the only way...
one day bitcoin will be seen as a driver for the computer industry...
just my 2 cents

Derivatives markets.  Futures, calls, puts, etc.  Options

Bitcoinica 2.0 corporate style.

How long till the winklevoss twin's ETF is up & running, so I can get my 401k involved?

That means wall street will spearhead pump-and-dump schemes and scams that will make Pirate and other notorious Bitcoin criminals look like saints in comparison.

What do you mean by deep deriv?

It's all to play for

Seriously, it's a no brainer that wall street is gonna come in soon, expect a deep deriv market to evolve as they do

hundreds of millions is still small compared to wall street. so this has to be just the first wave if inverstors.

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@ cr1776

i think so. he meant 100 mio.

The article says:

I presume it should say $100 million? So $30 million more in 3 weeks?

I am not entirely convinced volatility will be worse.  The past two crashes did not fall as far as the 2011 crash.  Of course there will be some ups and downs.  I am excited to see what happens next year regardless of the bumps in the road!

buckle up ... the rodeo is coming to town.

actually, at this point, if we had $999 million dollars pumped into BTC, it would probably have a pretty sizeable impact on bitcoins.

hundreds of millions leads to billions. 

at this point, hundreds of millions isn't even that much, but it could have a huge impact.. at least on speculation.

http://www.entrepreneur.com/article/230346

Why do I love articles like these so much?

Bullish news, yes?