Topic: Will The Bitcoin Investment Trust affect the price? - page 9. (Read 16830 times)

if i were in charge of purchasing the coins for the trust i would make sure to buy a healthy part at the exchanges to drive up price. that will make BIT look even more attractive since performace inreases with price.

Price impact: Dramatically up

But not right away. Consider what will happen:

1) It will take X days, weeks, or months for the initial few million $ worth to be bought up. Those purchases have no effect on the exchange price, or maybe even a mild negative effect if some who were buying coins steadily via the exchanges switch over to BIT.

2) Once the initial few million in seed is bought up, Second Market will start to purchase more, maybe $5-10 million worth. If they do part or all of this on an exchange, the price impact will of course be strongly positive. However, given how many contacts they have for private placement, they'll likely acquire part or all of those coins from dark, non-exchange sources. If they purchase very few of those coins on exchanges, the immediate price impact will be negligible, but the medium-term effect will be dramatic.  

The reason why is a bit subtle but very real: Insofar as the people Second Market buys the coins from would have sold those coins on exchanges if it weren't for SM giving them the wonderful opportunity to sell without slippage, that much less BTC is going to be available on the exchanges. The same amount of money chasing fewer BTC means a higher price per coin. But there will be a time delay, perhaps days or weeks, maybe in some cases months.

The fun part is that those who understand the time delay get to make money off those who are fooled by the time delay. Translation: Buy before the price rises and get in on the ground floor of the next stage of the bitcoin rocket.

The demand for a credible store of value always exists, and bitcoin is the best candidate due to its fixed and limited supply and superior international transaction ability

Neither does bitcodo

i have no idea what is going on. 

If you're short rare earths, you're on the wrong side of the trade. You should cover and go long.

Your assessment is wrong when it comes to Bitcoin, although your scenario may happen in a different circumstance but not the point of this discussion.

1000 people can share 1 bitcoin without any problems as bitcoin is divisible down to a satoshi. 1000 companies, however, can't use same 1 tonne of finite material because they all need that 1 tonne to manufacture products.

The point is, that if you limit the supply or availability, the price will drop after some time. First the price will go up, but then alternative will come and price will drop. This happend with natural rubber (world war) and will/is hapen to rare earths. China has monopoly and is abusing this. West spends milions on searching for alternatives. Many articles about rare earths, China, alternatives, price, mining,...
But with bitcoins, you don't need to invent anything, you don't need to spend anything, you just create new coin.

I know, you will say bitcoin is not commodity and that bitcoin is money or gold 2.0 and that my point is no good.

Yeah.

So what your saying is... its an absurd fallacy that has no place in a reasonable discussion.

This is a pointless debate since one can't have all the bitcoins. Some won't sell them and some will keep producing more to put into circulation.

Bitcoin is divisible down to a Satoshi so even if just a handful of bitcoins were in circulation people could still transact using fractions of bitcoin.

If you had all the bitcoins existed, how much they would be worth?
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i´d say they are worth what i paid for them.

Not really important because that isn't how it works.  But consider this..
If the value goes down, do you think some of those investors might sell?
The free market is a good thing.

If you had all the bitcoins existed, how much they would be worth?

you are basically saying that purchasing bitcoins will make less of them available (true) and this will lower the price ?

 

 

 

Right question to ask here would be:

How long until Bitcoin reaches the $7 billion market cap of Angry Birds( Rovio)? When/if that happens a Bitcoin should be worth around $640.

How long for Bitcoin to become bigger than Angry Birds? This is the million dollar question. I think right answer is yesterday but market is often irrational and needs time to adjust.

if only they were divisible...

Oh wait

Which should help with volatility in rallies.

If we could get some consistent sell pressure it would be fantastic for lessening parabolic moves.

The calculation is off... the investors are buying bitcoin yes, but the investing fund sells the underlying asset (bitcoins) at a trickle to pay its costs.  The buyers are not buying bitcoins per se, they are buying an investment vehicle, and the fund buys bitcoin with most of the money that the investors give them.

Essentially these funds create faucets of bitcoin and increase the price of bitcoins in the process.  Their investors pay for the privilege of doing this.

So we have all those trusts and funds; and they will grow and new will arrive. They will accumulate bitcoins. So no bitcoins left for real use. No real economy. And .... bitcoins will be worth 0.