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

Tin-foil hat conspiracy theory.

 

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?

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.

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?

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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.

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.

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.

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.

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.

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

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.

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

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).

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.

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.

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.


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.

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.

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.

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.

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.

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.

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 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.


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:


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?

Talking about this matter is more like a conspiracy because no one can verify it, we're just use our negative view against the centralized institution. I think there's always a clickbait news whether it's a good news or bad news, but it depend on which one will viral.

The most viral news will affect the market and people will not aware with the other news.

I am not sure every time MicroStrategy bought bitcoin, Bitcoin price increases but logically it sounds reasonable. Because people will see positive signals from MicroStrategy buyings and they will FOMO, lift the price up a bit more. However, it won't last too long because FOMO won't be able to result in sustainable price growth and price level. After FOMO effect is cooled down, price will be corrected a lot.

You can check more about MicroStrategy Purchasing history: https://bitcointreasuries.net/entities/1

Surley it is purely profit driven. They don't spend big capital just for fun or just to gain control of majority of the market and they do all of these for profit.

Look, Saylor's buying sprees during downtrends might seem like a coincidence to a naive viewer, but they're actually very smart! OTC trading isn't a dark, secret rite; it's a way for large institutions to hide their identities. It lets institutions buy a lot of Bitcoin without setting off alarms on the market

Why do they do it, though? Do you want to help people or do you want to hurt them? Both! Institutions aren't like simple picture bad guys or good guys. There's no doubt that they want to make money. But with money comes power, and power brings control. When you have a lot of Bitcoin, you're not just involved; you're a force to be taken seriously. And believe me, these places? They want to think deeply

Surely the main reason these institutional investors are buying BTC is to make profits, whether they buy OTC or through crypto exchanges, the main reason doesn't change. If they wanted to create manipulation, they will choose crypto exchanges, because their "buy or sell orders" will be open for all to see, and it can immediately influence the price movement in the market.

I don't think institutional investors want to gain control of a large percentage of the market in itself, but they just want to own enough BTC so they can make so much revenue when the price pumps. As for the reasons why some of them choose OTC, there are many actually, they don't want their buy or sell order to be public, it is less transparent to buy OTC than in crypto exchanges, they also want their tx's processed faster and probably with lesser hassles than crypto exchanges.

Well, Institutional purchases of Bitcoin, whether through OTC (Over-the-Counter) trading, can serve various purposes and it's not necessarily an either-or scenario between gaining control of the market and profit-driven motives. Here are some key factors to consider:

Profit Motive: One of the primary reasons institutions invest in Bitcoin is for profit. They believe in the long-term potential of Bitcoin as a store of value or digital gold, and they seek to benefit from its price appreciation over time. OTC trading with miners can offer advantages like lower fees and reduced price impact compared to buying on public exchanges, making it a more profitable approach.

Risk Diversification: Institutions often allocate a small portion of their portfolio to Bitcoin to diversify risk. Bitcoin's price movements are relatively uncorrelated with traditional asset classes, which can help mitigate overall portfolio risk.

Hedging against Inflation: Some institutions view Bitcoin as a hedge against inflation and currency devaluation. Buying Bitcoin can be seen as a way to protect the value of their assets in an environment of monetary expansion.

Regulatory Compliance: OTC trading with miners or other large holders of Bitcoin can help institutions comply with regulatory requirements. It allows them to conduct large transactions without causing significant market disruptions or raising concerns about market manipulation.

At last I can say,
while institutions do aim to make a profit when they accumulate Bitcoin, their motives are multifaceted. Profit is certainly a significant driver, but so are diversification, risk mitigation, long-term holding, and adherence to regulatory standards. Gaining control of the market is not usually the primary objective, as the cryptocurrency market is highly dynamic and difficult to control even for large institutions.

I would suggest that this is a complex solution. Of course, no one wants to buy more expensive if they can buy cheaper. But even if you want to acquire a large amount of any asset over a long period of time, simply buying up on the market can be a difficult task. And the purchase agreement from the "manufacturer" makes it more predictable, simple and convenient.

It's going to be more about getting better fills with their purchase at the current and fair market price in my opinion.

About your hypothesis about institutions wanting "to gain control of a large percentage of the market" - I believe for entities like BlackRock, it's ALWAYS in their M.O. to corner the market, IF they can. The situation that we should be concerned about is, how much of the TOTAL SUPPLY should be STORED in THEIR centralized vaults before we can actually say that Bitcoin is failing? What is the threshold? 50%? 60%?

Their motives are in all likelihood, no different to ours. They want to protect the value & purchasing power of their balance sheet. Inflation is running wild, a stealth tax that is melting away the value of their funds. Bitcoin has proven to be a great inflation hedge over the last decade so they are looking at it we a way of protecting what they have. They may have a lot more money than us but the motives are the same.

If they intend to gain control of a large percentage of the market, their ultimate goal is also profit. If they don't profit from controlling the market, what's the point of controlling? Just like why governments and banks want to control our money, isn't it because it makes them profitable? So I will agree with some of the above comments, organizations, governments or anyone once involved in investing in bitcoin, the profit is what anyone is aiming for.

When certain entities or institutions jump into Bitcoin there are 2 points that I pay attention to, regardless of how they get Bitcoin either from OTC or build ETFs like Blackrock did. But in this case the advantage is that Bitcoin is getting closer to the highest price, but on the other hand large institutions with budgets allocated for Bitcoin can easily play the market price so that their profits continue to increase. Don't underestimate Blackrock because they are closer to the SEC and when there is a case against Binance and Coinbase, we should be quite suspicious of Blackrock's involvement in it. Why is that? because if the ETF founded by Blackrock officially launches, big funds flowing quickly, the market will be much more unpredictable. Of course Blackrock will not be held responsible because the potential of Bitcoin has been disclosed by the owner of Blackrock in his interview session. Then does the entry of large entities into Bitcoin make us happy? 50% maybe but in the future I don't know when you have control you can easily manipulate prices in the market.

Back to the Bitcoin cycle where we can still predict the pattern, starting from the Halving/4 years because there are still few institutions that enter, but after large institutions enter they can make Bitcoin prices stable, there are no fluctuations that we often see, there are no challenges that can make us more profitable in collecting Bitcoins.

As small investors, we just need to follow it smartly and wisely, meaning now we have to be able to enter faster, collect more Bitcoins than before. Again, don't take it for granted that major institutions have taken steps to invest in Bitcoin.

it doesn't have to be miners. It could be other big traders who plan to close a position or market makers who make a big deal with the right premium and then try to close it in the market at a better price making money on the spread by providing the product to the whales - liquidity and time.

And I also heard a rumor that miner tokens are more expensive than market tokens because they are harder to track because they have no transaction history.

And back to the OP's question "are they doing it to gain control of a large percentage of the market or it is purely profit driven?"

What's the point of having a large market share if you don't make a profit? The goal of every investor is to book a profit at the end of the trade.

What if institutional investors use OTC bitcoin purchase to achieve both goals? Whatever they say, all their activities related to the bitcoin are aimed at making a profit and, of course, it makes sense to buy btc without intermediaries and directly, for the sake of a better purchase price (allows you to get a larger margin). This is especially true when considering the volumes (and amounts) that are being handled.

I won’t say whether they do it directly (purposefully) or indirectly, but institutional investors get a certain control over this market, which allows them to influence the current rate and extract the same profit from this.

In general, you'd be better off asking them directly about institutional bitcoin accumulation strategies and their motivations. Instead of speculating on the subject.

I wouldn't call this a "silent method" to buy BTC. This is just a direct method of buying lots of BTC by bypassing all the middlemen(centralized crypto exchanges). I'm sure that OTP trading could also have an impact over the Bitcoin price, because we can't have difference prices for Bitcoin on the trading platforms and outside the trading platforms(at least not in the long run). The miners also want to sell at a higher price.
The Bitcoin market cannot be controlled. We live in 2023 not 2013. Of course that the institutional investors are doing this for the profits. Do you think that they are doing it for charity?

Acquiring large amount of Bitcoin means they're have a power to control the market in short term effect and they also making money since there are so many stupid people making decision based on whales news, it's mean the answer is both of them.

Don't panic or worried too much, it's not as simple as that for a whale or country to buy all of mined coins.

Every businessman, its target is to realize a profit in the end and that's the game that these institutions, Banks, or hedge fund managers play to try to accumulate their portfolios fast and at cheaper prices. From the institutional point of trading, their way of trading is slightly different from the way we the retail traders trade because of the huge amount of money that they have (Millions-billions of dollars), so it takes them some time to properly take their position in the market because they need liquidity to buy therefore they would employ various ways to get their portfolios ready, maybe buying via miners, the OTC market and even from the main market.

I guess they are not different from us retail investors and average joe, we are driven to make profits specially in a bull run. So just like the rest of us, we wanted to accumulate more BTC, the only difference is that this whales and institutions have a deeper pockets, hence they can but huge amount via OTC or whichever way they can that will not trigger the market.

Doesn't matter if they are going to gain control of a large percentage, it's just on paper. Sooner or later they will have to sell it for profit and that's what motivated them to stack as much as they can, to the tune of millions of dollars.

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?