Betting on Bitcoin


#1

[Permalink]


#2

Isn’t the total bitcoins available at the moment small enough to be easily manipulated by a large enough fund?


#3

The currently traded price is between $120-135/btc. The total amount of available bitcoin is about 11 million btc. So the market cap is currently somewhere around $1.3 billion.

The current daily exchange volume is around 25’000btc so about $3.1 million/daily, about $100 million a month. An estimated 20’000btc are transacted on the blockchain (the estimates try to account for transfer to self owned addresses), so about $2.5 million/daily in some form of commerce.

It’s likely that these volumes are in the range of being somewhat easy to manipulate.


#4

Isn’t the total bitcoins available at the moment small enough to be easily manipulated by a large enough fund?

Probably not much worse than how our current markets are vastly manipulated.


Evidence of market manipulation in the financial crisis

http://necsi.edu/research/economics/bearraid.html



Is this about a fear of manipulation or merely a fear of “the new”?


#5

Cowicide, I think you make a good point about the risks with either investment model. Neither option seems very attractive to me. Both markets are vulnerable to bad behavior, and an individual like me has no choice but to suffer the results.


#6

Given the fees this fund is charging merely to hold a bunch of bitcoins (Not Exactly a ‘big data’ problem there…) they don’t even need manipulation to come out on top. Especially at a 25k minimum buy-in, how much could the services of somebody who assists you in the arduous task of storing a few kilobytes of data that you can buy over the counter without changing out of your pajamas be?


#7

I think all this proves is that some humans will gamble on anything, especially if they think there’s a way they can get a statistical advantage or manipulate the outcome. (Whether they’re correct in that belief is not relevant to its effect on their behavior.)


#8

No kidding. If you’ve got $25,000 to gamble, why not just buy the Bitcoins yourself?

Oh, I see. Because that’s too confusing for traditional investors. It says it right in the article.


#9

This topic was automatically closed after 5 days. New replies are no longer allowed.