Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 27115. (Read 26710923 times)

Closed bids is a scammy way for sellers to get more out of the buyers.

Happens a lot in the housing market. Peeking at bids and whispering advice to someone all that kind of thing. If you were to bid x Im _sure_ you would get it


Not sharing the results and bids after doesnt fill you with confidence on the transparency front.

Yeah and I suppose that the adoption rates will stay static as the hundreds of millions of VC cash poured into developing the ecosystem and as more and more huge companies take it on....  this has only just begun non? that is as plain as the nose on your face.

And if the price does go above 580$ I owe you nothing? It's a deal, I happen to have 0 BTC to spare. Oops, looks like you already won, contratulations. 

Explanation

Yup. This trend is bullish as #&$@. We just need some panic buys now.

I bet you 1 bitcoin that some time during the lifespan of bitcoin the price will rise above the $580 range.  If this does not happen in the next 5 years, I give you a bitcoin.  Sound fair?

Oh and a sell off before July? This consolidation has bear trap written all over it.

It's unlikely all the bidders are bears who want to bid way below market. The only reason a bear would want to buy those coins is to sell them immediately afterwards on the market. It's not easy to do that without huge slippage and also carries quite a lot of risk since it takes like a week before they actually receive the coins. If news comes out someone bought the coins with a huge discount the market will dive down way before the bidder receives their coins. I think it makes a lot more sense for a true bear to just go short on Bitfinex or find someone to lend them some coins.

That's why the pessimistic bidders are unlikely to win if the market is in a downtrend. The bears should bid like 20% below market price. The bulls (if any) will be willing to hold the bag.

Nobody is going to give themselves only a 10% profit margin if they are pessimistic. In fact professionals don't like trading against the market period. So most of the buyers are probably bulls, unless they're sending ridiculously low-ball offers like $200 per coin.

Yes, he must include that forced delay in his estimate of how much money he would get if he got those coins.  It is irrelevant for the optimistic bidder, very important for the pessimistic bidder.

Explanation

There is a timing problem with the 'buy to dump immediately on exchanges' scenario:
The bidding is on the 27th, Online auction period from 6:00 AM EDT to 6:00 PM EDT
30th Winning bidder notified by 5:00 PM EDT
1st July Phase III Deadline for winning bidder to initiate wire transfer
The bitcoins will reach the winner(s) after the wire transfer completes (at least that seems reasonable to me),
so they can only be dumped around the 3rd July. The buyer has to be cautious with respect to market movement 27th June - 3rd July.

that's new.

If I were bidding at such a sealed-bid auction, I would try to estimate (a) how much revenue I could get from the item if I got it, and (b) what is the minimum profit that I would be happy with on my investment. Then I would bid for the difference (a) minus (b).

For example, I am currently pessimistic about the chances of the price ever getting much higher than now, and expect a downtrend in the short term.  Therefore, if I were to get those bitcoins I would try to sell them right away for the best price, as fast as I could.  If the auction were today, I would expect to get maybe 550 USD/BTC average from selling 3000 coins on the exchanges over the next week.  Thus, I would bid for 500 USD/BTC to have an expected profit of 150'000$ with an investment of 1'500'000$.

By the same reasoning, someone with a more optimistic outlook may bid higher than market.  If he expects BTC to be 10'000 USD next year, then he can bid at 5'000 USD/BTC and still expect to make a nice profit.  But if such person existed, he would be buying all coins in the market now, at any price.  Obviously the optimists are all out of money now.

I suppose that one can build more sophisticated probabilistic models to find one's optimum bid, given one's expectations about future bitcoin prices.  However, one must assume a very broad probability distribution for the other people's bids, so I doubt that one can do much better than the simplistic method above.

You're talking about manipulation of billion dollar trades versus manipulation to a acquire a million dollars worth of bitcoin.  the calibre of investor who engages in the former is not going to risk their operation by taking extra risks to engage in the second. That was my point. The amounts of money involved here with this bitcoin auction are peanuts compared to the amount of money that the buyers are used to playing with so why would they bother with market manipulation?

The process seems a little illogical in certain respects, but it seems to clearly communicate what it will be.  Additionally, the actual bidding seems to be a little less than transparent, yet I would imagine that they cannot give a lot to anyone who bid lower, b/c the higher bidder would truely complain if s/he did NOT receive a lot and a lower bidder did.

Wakey,wakey.

http://www.zerohedge.com/news/2014-06-19/peek-inside-secret-world-currency-manipulation

Yes, but only if you sold less coins than you plan on buying. It would be a risky move that could backfire (sure someone will try it though).

Personally I'm pretty sure most, if not all, batches of FBI coins will sell for a premium. Not because the coins are "clean" or "collectible", but because the investors would happily pay more to avoid slippage.

Think about this hypothetical situation:

20 individuals bid on the coins. I think most investors would bid for more than 1 batch of coins, with a number of bids below market and a number above market price. You only need half of the individuals to make a single bid over market price for all the coins to sell at a premium.

In other words, if you think ALL of the coins will sell at a discount, then that means that NOT A SINGLE BIDDER will bid over market. Pretty unlikely I would say.

Explanation