Is it totally implausible that agents of a Central Bank could be quietly buying BTC and systematically dumping at a loss at precise times in order to suppress price?
Net losses would be negligible for that type of entity and might easily be swept under the rug in a context of monetary expansion.
Yes it's impossible because :
http://nakamotoinstitute.org/mempool/bitcoins-shroud-of-subtlety-and-allure/Only individuals can understand that Bitcoin is a threat to the institution they report to. And when they understand it the best strategy is just to "default" : minimize the risks to their superiors and move some of their personal wealth to Bitcoin.
The price is suppressed simply because right now there are less buyers than sellers.
Interesting article, thanks. But I don't think it shows the scenario I proposed was implausible. If successful, the argument establishes that Bitcoin cannot be destroyed by the proposed stratagem. Now I am not sure the argument is successful, since a CB has virtually infinitely
more buying power than its agents, should they chose to invest in the opposite direction of the policy they implement.
But in any case, the argument certainly does not show that the stratagem cannot be successfully implemented temporarily. Why would a CB implement the stratagem if it is thought that in the long run it will not be sufficient to kill the coin? Well, to achieve a temporary suppression of price, for whatever reason. Or as a part of a multi-pronged attack.
I used to think CBs would not touch Bitcoin (i.e., would not accumulate BTC as a hedge that would cost them essentially nothing) because to do so would counterproductively increase BTC's price and devalue the CB's currency vis à vis BTC. But in the proposed scenario CBs are not hedging accumulators, they are saboteuring dumpers.
Which seems to fit the market behavior we've been seeing for several months (whereas transaction data seems to indicate pressure on the buy side, contrary to your admittedly reasonable explanation).
