Strategies of Institutional Bitcoin Accumulation and Their Motivations

Wind_FURY

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Quote from: Lucius on August 26, 2023, 04:48:51 AM

Quote from: franky1 on August 25, 2023, 09:14:30 AM

Quote from: Lucius on August 25, 2023, 08:44:42 AM

Where did you get that information from? BlackRock is only exposed to BTC as a shareholder of Microstrategy, and why would they buy BTC if their spot BTC ETF has not been approved yet?

because they need to have reserves to prove they can open up a ETF market
they need to have the reserves to even be able to offer baskets of shares that represent the coins
they cant sell unbacked shares to then buy coins they do not yet have.. as thats against the purpose of a ETF
its why the winkle twins(gemini) grabbed loads of coins before filing a ETF many many years ago. its why grayscale did too

I was convinced from some other discussions that the purchase of BTC occurs only when the ETF is approved and when their clients express interest in such an investment. But let's say you are right, is there some amount of BTC for the purpose of proving that they as a company are ready to offer such an ETF?

Tin-foil hat conspiracy theory.

Cool

Because BlackRock probably knows that they already have the approval as good as secured, then why not slowly start accumulating some coins for their personal wallets. It's also the same with some of those nefarious people behind the SEC too, why not? ¯\_(ツ)_/¯

We already know they're not trustworthy, no?

flyingcarpet

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Quote from: KingsDen on August 26, 2023, 03:20:25 AM

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.
Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

Everyone in the crypto-currency market has just one intention of making profit and nothing else. Only the people who are looking for privacy that are using privacy coins to conceal some things. The institutional traders otherwise known as the market maker are the people that control the market direction. When those people begin to buy Bitcoin in secret or any other coin without the knowledge of the public they do so in order to give them a very huge volume of that particular coin to enable them manipulate the market at their own time or convenience.

So anyone controlling the larger part of the market can make a pump or dump at any time. That is the secret behind it, when they want to influence the market they will now make it known to the media through the exchanges. And when they want to control volume, they will do it secretly.

Of course, their goal is to make a profit. Institutions or individuals who own a lot of Bitcoin also have the power to determine the direction of the market. I'm sure everyone agrees on this.

After Bitcoin reaches a certain price level, many institutions or people who invest in Bitcoin do not sell all of their Bitcoins. It will always be preferable to have Bitcoin in their portfolio. When they sell a certain amount, it has an impact on the market, but the market always recovers positively. That's one of the things that makes Bitcoin beautiful.

Those who have enough BTC to lead the market can never do without Bitcoin in their portfolio. So the price will drop from time to time but in the end, whoever holds Bitcoin will always win.

You can sell bitcoins to make a profit, but you still buy them later to own bitcoins.

Lucius

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Quote from: franky1 on August 25, 2023, 09:14:30 AM

Quote from: Lucius on August 25, 2023, 08:44:42 AM

Where did you get that information from? BlackRock is only exposed to BTC as a shareholder of Microstrategy, and why would they buy BTC if their spot BTC ETF has not been approved yet?

because they need to have reserves to prove they can open up a ETF market
they need to have the reserves to even be able to offer baskets of shares that represent the coins
they cant sell unbacked shares to then buy coins they do not yet have.. as thats against the purpose of a ETF
its why the winkle twins(gemini) grabbed loads of coins before filing a ETF many many years ago. its why grayscale did too

I was convinced from some other discussions that the purchase of BTC occurs only when the ETF is approved and when their clients express interest in such an investment. But let's say you are right, is there some amount of BTC for the purpose of proving that they as a company are ready to offer such an ETF?

Quote from: hd49728 on August 25, 2023, 09:22:05 AM

Likely Saylor and MicroStrategy only did Dollar Cost Averaging when they had new capital for DCA. They don't care what is price of their buying and I remember I read that after MicroStrategy buyings, Bitcoin usually have dips.
~snip~

You are right, and I remember it as a somewhat strange coincidence that has already become a rule, which only confirms that Saylor and his company have almost no effect on the price. If someone else like Mr. If Mars or Bezos bought the same amount of BTC and announced it publicly, I'm sure the price would jump by at least 15-20% within a few hours, and at least 25% in the next few days.

bhadz

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Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

When Michael Saylor's, MicroStrategy buys bitcoin, the market price increase and they usually do so to mostly when the market is experiencing a down turn. Correct me if I am wrong but I am assuming they don't do so from miners via OTC trading offers. Keep reading . I was still years old(don't crucify me) when I learned that institutions can accumulate substantial amounts of Bitcoin without triggering significant fluctuations in the market price. They execute this through purchasing Bitcoin directly from miners via OTC trading offers. Now, I have learned that this is one of the ways that Blackrock is accumulating bitcoin. As some asked, I will ask here too: when institutions use this "silent" method to buy bitcoin, are they doing it to gain control of a large percentage of the market or it is purely profit driven?

IMHO, both. They won't just do it for the sake of adoption and the community but take note that they're an institution and no matter what is the reason for them to buy bitcoin, taking profit is part of it. Honestly, it makes me worried until when these huge institutions are going to start selling off. Like with SpaceX which isn't really a big institution that holds a lot of Bitcoin. But in terms of BlackRock and MSTR, they're the bigger player here. And that's why it's for both, they gain a huge part of the market and at the same time, taking profit is a reason that can't be removed.

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Quote from: KingsDen on August 26, 2023, 03:20:25 AM

Everyone in the crypto-currency market has just one intention of making profit and nothing else.

If they buy and sell cryptocurrency because they need it for their payment to buy something, it is not solely because of profit. Although, for such situations, no profit related but reasons why did they join cryptocurrency market is a little bit deeper and behind it maybe they have profit hunting intention.

Quote

Only the people who are looking for privacy that are using privacy coins to conceal some things.

Practice to get privacy is not to conceal something. Like a house has a fence and gate, to protect its citizens' privacy. Even they don't do anything illegally and privacy is a basic rights.

Some of us did not know important of privacy and did not know how to get it. We started as newbies and only learned about privacy importance as well as how to achieve it after a while. Unfortunately, when we learned about it, realized its importance, we lost our privacy somewhere already.

Anyway it is not bad to improve our practice and protect our privacy better with time. What lost is lost but if we are more careful, we will not lose more.

KingsDen

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Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.
Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

Everyone in the crypto-currency market has just one intention of making profit and nothing else. Only the people who are looking for privacy that are using privacy coins to conceal some things. The institutional traders otherwise known as the market maker are the people that control the market direction. When those people begin to buy Bitcoin in secret or any other coin without the knowledge of the public they do so in order to give them a very huge volume of that particular coin to enable them manipulate the market at their own time or convenience.

So anyone controlling the larger part of the market can make a pump or dump at any time. That is the secret behind it, when they want to influence the market they will now make it known to the media through the exchanges. And when they want to control volume, they will do it secretly.

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Quote from: Wimex on August 25, 2023, 03:34:09 PM

Quote from: Kemarit on August 25, 2023, 02:36:48 PM

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.

On the contrary, if they can but bitcoin, thru OTC, maybe they can sell the same way, so that it won't have any influence on the price. Because if they sell thru exchanges and some noobs see their sell wall at certain price, it might create fear on them, thus they are also going to sell.

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

But here I will agree, everyone here is looking to make profits, whether average joes or this institutions. Obviously, ours can only create that much profit because of our capital. But this institutions are going to look for greater profits because they have invested a lot of money.

And it is that has that investment capacity if he had considerable capital or simply managed a company i am sure that he would do the same as these people....... He would invest a reasonable amount of what I produce, he trusted in the potential of bitcoin i suppose they would too They do these types of actions, i guess that when they buy bitcoin They do it after analytical studies to achieve their goal, something similar to what those of us with less movement do..... but with more pronounced strategies, They cannot afford to lose, for obvious reasons they will obtain many more profits, these institutions know what they are doing they know bitcoin, They are experienced and therefore They influence others maybe not in those who already have time in this and follow their own hunches but, if in those fearful that they are carried away by the big ones, and following in the footsteps of these bitcoin traders may Work for them but it will not always be so.

Its interesting how you talk about the delicate dance between giant institutions and regular people like us, right? In human history, the wealthy have always ruled. They're not playing with Bitcoin for fun; its planned. Waves form when these huge items move. People with experience in crypto have their own feelings and instincts. But newcomers? They usually ride the major players' waves. It seems like the biggest players have always been the most powerful. Bitcoin is just the beginning. It may work for a while to follow their advice, but everyone must quit. Stay aware

Darker45

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If you could please provide us the link of the news or article which claims that BlockRock is accumulating Bitcoin directly from miners.

We actually don't know the motives behind purchasing Bitcoin via OTC. Unless BlackRock states its reasons for buying Bitcoin directly from miners, all we can do is speculate.

One reason could be that they don't want the price to spike especially if they purchase huge amounts through exchanges. That would mean they'll pay a higher price. Another would be that buying through exchanges in bulk could be complicated. Buying through a mining company is an easy and quick transaction. Or perhaps they don't want to identify themselves so they rather buy it via OTC.

Finally, it's always profit-driven.

eaLiTy

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Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

~
when institutions use this "silent" method to buy bitcoin, are they doing it to gain control of a large percentage of the market or it is purely profit driven?

Everyone who invested money is for the profit and if anyone says otherwise, they are bluffing Cheesy

. Blackrock is not only investing in cryptocurrency but they own companies globally and they invest on a global scale and they manage over a trillion dollars worth of assets and their investment in BTCitcoin is purely profit driven and so is the case with every other institutional investors.

The Cryptovator

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Institutional investors have the flexibility to acquire assets discreetly or with public announcements. Typically, they opt to accumulate holdings when prices drop to a reasonable level. The method of accumulation isn't a significant factor; however, when they reveal their newly acquired Bitcoin, the market tends to respond positively, despite the lack of impact during the actual purchase. This positive reaction remains consistent, whether they acquire directly from miners or through other means. Quiet acquisitions usually don't influence the chart unless they involve substantial purchases, as people are drawn to positive news and may experience FOMO (fear of missing out).

Wimex

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Quote from: Kemarit on August 25, 2023, 02:36:48 PM

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.

On the contrary, if they can but bitcoin, thru OTC, maybe they can sell the same way, so that it won't have any influence on the price. Because if they sell thru exchanges and some noobs see their sell wall at certain price, it might create fear on them, thus they are also going to sell.

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

But here I will agree, everyone here is looking to make profits, whether average joes or this institutions. Obviously, ours can only create that much profit because of our capital. But this institutions are going to look for greater profits because they have invested a lot of money.

And it is that has that investment capacity if he had considerable capital or simply managed a company i am sure that he would do the same as these people....... He would invest a reasonable amount of what I produce, he trusted in the potential of bitcoin i suppose they would too They do these types of actions, i guess that when they buy bitcoin They do it after analytical studies to achieve their goal, something similar to what those of us with less movement do..... but with more pronounced strategies, They cannot afford to lose, for obvious reasons they will obtain many more profits, these institutions know what they are doing they know bitcoin, They are experienced and therefore They influence others maybe not in those who already have time in this and follow their own hunches but, if in those fearful that they are carried away by the big ones, and following in the footsteps of these bitcoin traders may Work for them but it will not always be so.

Ale88

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Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

As some asked, I will ask here too: when institutions use this "silent" method to buy bitcoin, are they doing it to gain control of a large percentage of the market or it is purely profit driven?

They don't care at all about controlling the bitcoin market, they just do it because they can make a lot of money out of it. These funds make a ton of money thanks to commissions, and if they accumulate now, before the ETFs get approved, they can also sell later and make another profit. Why do people give money to these funds? To make more money, that's it.

Kemarit

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Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.

On the contrary, if they can but bitcoin, thru OTC, maybe they can sell the same way, so that it won't have any influence on the price. Because if they sell thru exchanges and some noobs see their sell wall at certain price, it might create fear on them, thus they are also going to sell.

Quote from: Strongkored on August 25, 2023, 09:33:32 AM

Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

But here I will agree, everyone here is looking to make profits, whether average joes or this institutions. Obviously, ours can only create that much profit because of our capital. But this institutions are going to look for greater profits because they have invested a lot of money.

Bananington

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Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

When Michael Saylor's, MicroStrategy buys bitcoin, the market price increase and they usually do so to mostly when the market is experiencing a down turn. Correct me if I am wrong but I am assuming they don't do so from miners via OTC trading offers. Keep reading . I was still years old(don't crucify me) when I learned that institutions can accumulate substantial amounts of Bitcoin without triggering significant fluctuations in the market price. They execute this through purchasing Bitcoin directly from miners via OTC trading offers. Now, I have learned that this is one of the ways that Blackrock is accumulating bitcoin. As some asked, I will ask here too: when institutions use this "silent" method to buy bitcoin, are they doing it to gain control of a large percentage of the market or it is purely profit driven?

Besides the institutions using such method to accumulate BTC, it is applicable to individual users who do same. It is glaring the DCA is used to this effect, otherwise it wouldn't be a silent investment.
The choice of any business or institution is theirs to follow through, what only matters to other customers on the platform would be to simply keep abreast with updates or rather signals about when such institutions move the funds they have accumulated. The noise during such movement often exposes such institutions and it does affect the market if this movement is made at once.
Expansion is done this way for large institutions with a long-term plan and without having to bother about the value becoming worthless.

Captain Corporate

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To be fair they are not doing anything that you can't personally do. These are huge companies that make constant income, and you should have a salary or something like that as well. Which means that you are going to end up with the same method as they do if you want to. What is that? They have an income, and they spend some of that income by buying bitcoin in bulk, you can't buy in bulk but you do have an income as well and you can spend a portion of it on bitcoin as well. Obviously its not going to be similar amounts, but you could at least copy the method. Their aim is to have as much bitcoin as possible and not sell, just hold it as an asset, and you can do that too.

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I've heard the thing about OTC deals and that institutional purchases thus don't really fluctuate the price several years ago, and I still think that makes sense. However, it's not the whole story, as a simple way to impact the price is to make an official announcement or just leak into about the deal to the media. Once articles like "Tesla invested $2 billion into Bitcoin" appear, it's the news that triggers FOMO. So it's still related to the purchase, but conditional upon media coverage. So it's not that silent, really.
Another thing to account for in that some institutions don't necessarily need BTC price to rapidly go up. They may be charging customers for storing their funds, for example, and/or transaction fees. I'm thinking about Grayscale with their 2% annual fee and a minimum $50k investment.

Strongkored

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Controlling most of the market by having a large portion of Bitcoin means that they have the power to be able to influence market prices so that they will benefit these institutions when their target price is reached, by selling them on the exchange to take profits.
Big institutions have the same interest as retail, namely making a profit by owning Bitcoin either by buying it on the market or secretly from miners, and the more amount they have when the price is low, the greater the profit they will get when the price goes up, they focus on profit like most people who invest in Bitcoin. Bearish to buy and Bullish to take profit.

hd49728

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Quote from: Lucius on August 25, 2023, 08:44:42 AM

I would not agree with that assumption, because even though this may have been the case in the beginning, now these investments are less and less (if we look at the amount of BTC purchased) and have almost no influence on the price of BTC. Likewise, Saylor is not one of those who knows (or wants) to hit the dip, but buys when they have enough cash, regardless of the price.

Likely Saylor and MicroStrategy only did Dollar Cost Averaging when they had new capital for DCA. They don't care what is price of their buying and I remember I read that after MicroStrategy buyings, Bitcoin usually have dips.

Check some in Bitcoin Historical price and events. #211 shows price dip a few days after MicroStrategy purchase.

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Quote from: Lucius on August 25, 2023, 08:44:42 AM

Where did you get that information from? BlackRock is only exposed to BTC as a shareholder of Microstrategy, and why would they buy BTC if their spot BTC ETF has not been approved yet?

because they need to have reserves to prove they can open up a ETF market

they need to have the reserves to even be able to offer baskets of shares that represent the coins
they cant sell unbacked shares to then buy coins they do not yet have.. as thats against the purpose of a ETF

its why the winkle twins(gemini) grabbed loads of coins before filing a ETF many many years ago. its why grayscale did too

Lucius

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Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

When Michael Saylor's, MicroStrategy buys bitcoin, the market price increase and they usually do so to mostly when the market is experiencing a down turn.

I would not agree with that assumption, because even though this may have been the case in the beginning, now these investments are less and less (if we look at the amount of BTC purchased) and have almost no influence on the price of BTC. Likewise, Saylor is not one of those who knows (or wants) to hit the dip, but buys when they have enough cash, regardless of the price.

Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

Correct me if I am wrong but I am assuming they don't do so from miners via OTC trading offers. Keep reading . I was still years old(don't crucify me) when I learned that institutions can accumulate substantial amounts of Bitcoin without triggering significant fluctuations in the market price. They execute this through purchasing Bitcoin directly from miners via OTC trading offers.

Exactly, if you want to buy a lot of BTC without affecting the price (which is desirable if you plan further investments), then use the OTC method and a company that will do it for you. An example of how it was done by Microstrategy with the help of Coinbase:

Quote from: Davidvictorson on August 24, 2023, 08:42:24 AM

Now, I have learned that this is one of the ways that Blackrock is accumulating bitcoin. As some asked, I will ask here too: when institutions use this "silent" method to buy bitcoin, are they doing it to gain control of a large percentage of the market or it is purely profit driven?

Where did you get that information from? BlackRock is only exposed to BTC as a shareholder of Microstrategy, and why would they buy BTC if their spot BTC ETF has not been approved yet?

Topic: Strategies of Institutional Bitcoin Accumulation and Their Motivations (Read 282 times)