Topic: How much would it cost to drive BTC to $100? - page 2. (Read 4535 times)

Let's say you're a manager of a big tech fund looking to allocate into a new asset. It's back in 2001 and Apple just released its first iPod. You're knowledgeable enough to assess the technology and its economic implications and smart enough to see the potential of the product and the company. Your run your models and it looks all good.

The stock is out of favor though, trading at about 7.70 USD. It went through a violent bubble just a year ago, reaching 35 bucks before crushing to single digits. Not many people appreciate it, and some doubt that the company will even survive.

Do you know for sure this dog of a stock will become a 100-bagger in the next 10 years? Not really, but your models, fundamental analysis and intuition all agree that it is grossly undervalued.

Once you decided to invest, do you aggressively bid the stock up, trying to impose you vision of AAPL valuation on the market? Not really, you patiently accumulate trying not to overpay and hope that you have enough time to form your position before market reevaluates the stock.

What good is it to you if you're bidding the price up aggressively? Can you create a temporary price bubble? Quite possibly, if you possess enough funds. Will it influence other people's view of the stock? Very little, they have their own vision that evolves at their own pace. So, once you stop pumping the stock it will slide right back down where the current market consensus is. So, there is no benefit to you in it, as you cannot exit your position easily - it's just to big. You can only exit at market consensus price or even at a discount.

If you are right about the stock fundamentals and its long-term valuation, the market consensus will evolve over time and the price will appreciate long-term, regardless of temporary ups and downs, bubbles and crashes. You'll get your 100-bagger or whatever your luck is. If you are wrong, no amount of price pumping can possibly do you any good.

So you really have $1.3M in Gox? I wonder what would happen if you simply click "BUY BITCOINS".........

By the way, this:
is wrong, because you never know how many bitcoins are sitting on gox but not on the order book

You didn't get into my argument

You mean when we fell from $30?  Just wait, we will be making new highs very soon. 

You should buy back your BTC now.

That didn't work out too well last time did it?
It only needs a few fat finger trades to ruin it, sure $100 can happen in a flinch - the question is if it will rise further on its own. Nobody wants to overpay for an asset, no matter how good (you think) the fundamentals may sound.

Have fun with the calculator: http://bitcoincharts.com/markets/mtgoxUSD_depth.html

 

WOW!. Wish my Gox was as big as yours!

There are currently 65614.1 Bitcoins for sale on MtGox priced under $100. If you place an immediate order to buy all the Bitcoins available on MtGox priced below $100, and then bought .1 BTC of the $100 Bitcoins, the "last trading price" would be $100. The amount of money this would currently take is $1,087,817.82. Since you would be buying almost all the Bitcoins currently for sale in this exchange, you could maintain the $100 price cheaply, at least for the hour it would take other sellers to send more Bitcoins in.

You can do the same thing on a low volume exchange for much cheaper.

edit: it looks like MtGox doesn't correctly calculate the true price to buy xxxx BTC; the answer is currently $1,695,122 USD to buy to $100.

Indeed you won... I just hope that YOUR funds earmarked for BTC are fully deployed by now.

Lol what the hell, that was the whole point of the thread -.-....doesn't matter if it's stupid or not. I think I've won because I provided the fastest way to drive BTC to $100

I'd never do that with my money, it's a lot easier to just hire minions to do the work for you

Oh yeah, right. Yes, all it takes for the price to shoot to 100 is about 2 million USD and one not-so-bright investor following straightforward BUY-BUY-BUY strategy that Jakers described for a couple of days.

Of course, read the title. This is asking what it would take, and my numbers were just estimates, I really have no clue the exact amount of BTC:USD ratio that there is right now. So obviously, what I mentioned would shoot the prices up, as you just stated yourself  . I would however, invest money like you said, and I wouldn't mind if other people jumped in, because after all, that is what I wanted to do in the first place (title of the thread).

Jakers, I do not think your opinion is based on practical experience, sorry. You're making two unrealistic assumptions. First, it is that you're the ONLY guy on the market who wants to deploy millions of fiat into BTC. This obviously could not be the case.

Second, that all these piles of BTC that you see sitting on the ask side are ACTUALLY FOR SALE. If you watched the market action more carefully you'd notice that once the price action gets close to these "gobs of BTC for sale", they in most cases mysteriously disappear... The reason for this is evident to anyone who will read my post carefully and understand what is written there.

So, if you actually move a couple million USD into Mtgox and try just to buy up stuff using a simple strategy you suggest, the market will very shortly self-correct. The huge fake asks will disappear, your hidden competitors will come out in full force and the price will shoot up like there is no tomorrow in a short time frame, leaving you with almost no BTC. Incidentally, I believe this is exactly what will happen sooner or later when the dumb money start to rush into BTC following the current smart ones.

LOL

But you can always dream can't you?  

Arvicco, it'd be fairly easy to get a large portion of the markets BTC before the prices were to shoot up. At most you'd be looking at a $5-$20 increase in the time you were buying all of them. Someone with significant funds, this wouldn't be a problem.


If I had 1,000,000 or 1,000,000,000. I'd be able to spend most of it on BTC in the first few months, buying them for over market price wouldn't drive it up because it'd only be one person doing it. If several people were to do it, it would sky rocket. I would say 75% of the way through your funds is when you'd really have a worry about prices rising and BTC becoming unavailable.

This is not an issue. When you've decided to allocate significant funds into BTC, the issue is not "driving the price up to 100". The issue is preventing it from shooting up to 100 before you're done with your allocation. BTC "market cap" is ridiculously low, and the free float is much lower still (one estimate is 25%, so just a bit north of USD 40 million). So, deploying even relatively insignificant amount like several million USD is very likely to disrupt the balance and push the price up by quite a bit.

Now, much more interesting question is: How do you actually deploy significant funds into BTC without pushing the price over 100?

Here is how. You move your funds to Mtgox slowly over time, in small portions not more than 50K USD each. You carefully stack your bids, keeping most of them way below the market to avoid influencing the everyday price discovery while taking advantage of petty market panics. You also keep the ask side artificially high with off-market walls to create an illusion of BTC abundance. From time to time you set up huge ask walls close to market to provoke the bears and small speculators into dumping their coins. You buy all the dumps without looking too eager. You damn the moron bulls who show off their bid walls too close to market and scare away the bears. With luck and patience, you'll be able to accumulate quite a bit of coins without too many people noticing what's going on. Your job is to prevent the market from realizing the scale of redistribution that is happening before your funds are fully deployed.

Oh yeah, and you do not even bother to drive the price up. The fundamentals of bitcoin adoption will do it for you in any case, making it a 10-bagger at the very minimum. You are quite sure about it, as you've done your fundamental analysis and due diligence beforehand. So, it does not matter much if it happens within 1 year or 10 years. Let the speculators be excited about "OMG, BTC is going to 17! no, it'll be even 17.5! and then I'll dump!".

Does the market behavior described above look familiar to people watching Mtgox for the last year or so, by any chance? Hmm, I wonder why is that...

It'd only take a few months if you had the right funds. I'd just buy them all and hoard them for about 5 years, then dump them for like +900% profit

This doesn't make sense. Anybody having significant funds wouldn't want for BTC to go up unless the funds are significantly limited.  

But for the heck of it: Repeatedly do market orders on the smaller exchanges for the period always buying as much so that you would have payed the same on mtgox (which is usually higher without the strategy). If that isn't sufficient balance across all exchanges depending on the liquidity.