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Post by Gooba on Aug 10, 2017 6:55:35 GMT -5
We are back processing Bitcoin payments. Please note we accept BTC ONLY. Bitcoin Cash is currently NOT supported.
Thank you for your comprehension in this matter.
5Dimes Group Management.
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Post by Makers on Dec 8, 2017 7:11:16 GMT -5
The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market A few massive investors can rock it with a shrug.
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency.
Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year.
About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What’s more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
“I think there are a few hundred guys,” says Kyle Samani, managing partner at Multicoin Capital. “They all probably can call each other, and they probably have.” One reason to think so: At least some kinds of information sharing are legal, says Gary Ross, a securities lawyer at Ross & Shulga. Because bitcoin is a digital currency and not a security, he says, there’s no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.
Regulators have been slow to catch up with cryptocurrency trading, so many of the rules are still murky. If traders not only pushed the price up but also went online to spread rumors, that might count as fraud. Bittrex, a digital currency exchange, recently wrote to its users warning that their accounts could be suspended if they banded together into “pump groups” aimed at manipulating prices. The law might also be different for other digital coins. Depending on the details of how they are structured and how investors expect to make money from them, some may count as currencies, according to the U.S. Securities and Exchange Commission.
Asked about whether large holders could move in concert, Roger Ver, a well-known early bitcoin investor, said in an email: “I suspect that is likely true, and people should be able to do whatever they want with their own money. I’ve personally never had time for things like that though.”
“As in any asset class, large individual holders and large institutional holders can and do collude to manipulate price,” Ari Paul, co-founder of BlockTower Capital and a former portfolio manager of the University of Chicago endowment, wrote in an electronic message. “In cryptocurrency, such manipulation is extreme because of the youth of these markets and the speculative nature of the assets.”
The recent rise in its price is difficult to explain because bitcoin has no intrinsic value. Launched in 2009 with a white paper written under a pseudonym, it’s a form of digital payment maintained by an independent network of computers on the internet‚ using cryptography to verify transactions. Its most fervent believers say it could displace banks and even traditional money, but it’s only worth what someone will trade for it, making it prey to big shifts in sentiment.
Like most hedge fund managers specializing in cryptocurrencies, Samani constantly tracks trading activity of addresses known to belong to the biggest investors in the coins he holds. (Although bitcoin transactions are designed to be anonymous, each one is associated with a coded address that can be seen by anyone.) When he sees activity, Samani immediately calls the likely sellers and can often get information on motivations behind their sales and their trading plans, he says. Some funds end up buying one another’s holdings directly, without going into the open market, to avoid affecting the currency’s price. “Investors are generally more forthcoming with other investors,” Samani says. “We all kind of know who one another are, and we all help each other out and share notes. We all just want to make money.” Ross says gathering intelligence is legal.
Ordinary investors, of course, don’t have the cachet required to get a multimillionaire to take their call. While they can track addresses with large holdings online and start heated discussions of market moves on Reddit forums, they’re ultimately in the dark on the whales’ plans and motives. “There’s no transparency to speak of in this market,” says Martin Mushkin, a lawyer who focuses on bitcoin. “In the securities business, everything that’s material has to be disclosed. In the virtual currency world, it’s very difficult to figure out what’s going on.”
Ordinary investors are at an even greater disadvantage in smaller digital currencies and tokens. Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3 percent of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40 percent of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90 percent. Many large owners are part of the teams running these projects.
Some argue this is no different than what happens in more established markets. “A good comparison is to early stage equity,” BlockTower’s Paul wrote. “Similar to those equity deals, often the founders and a handful of investors will own the majority of the asset.” Other investors say the whales won’t dump their holdings, because they have faith in the long-term potential of the coins. “I believe that it’s common sense that these whales that own so much bitcoin and bitcoin cash, they don’t want to destroy either one,” says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.
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nose
Premium Member
Posts: 3,174
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Post by nose on Dec 8, 2017 7:35:41 GMT -5
Interesting read
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Post by Makers on Dec 25, 2017 11:32:45 GMT -5
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Post by starbuck on Dec 25, 2017 11:42:50 GMT -5
I made nearly $20k the last 72 hours playing the coin market. Luckily I had cashed out my coins when it hovered around $19k. A few days later it dropped down to $10k. I decided to dump back in and rode it back up to $17k and sold again. It’s dropped again since but not as bad as a couple of days ago. Many freaked out but it was nothing more than a much needed correction. After the first of the year I think it will top over $20k and keep going.
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Post by Makers on Dec 25, 2017 11:44:05 GMT -5
Has died many times.... :)
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brymel2
Premium Member
Posts: 2,527
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Post by brymel2 on Dec 25, 2017 11:46:54 GMT -5
Good job playing the market SB
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Post by cremesaver on Dec 25, 2017 11:53:54 GMT -5
great job buck a very merry bitcoin xmas
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Fish
Premium Member
Posts: 3,502
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Post by Fish on Dec 25, 2017 12:41:18 GMT -5
Dasher and Comet and Bitcoin and Blitzer.
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Post by starbuck on Dec 25, 2017 13:48:26 GMT -5
Thanks guys. A lot luck as I haven’t been in it long.
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Post by cremesaver on Dec 25, 2017 16:03:31 GMT -5
just remember rake some of your profits and keep it going
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Post by stickbit on Dec 25, 2017 20:31:47 GMT -5
SB - been doing the same for a while...curious are you long on any alt coins? or daytrading everything?
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Post by starbuck on Dec 26, 2017 12:11:06 GMT -5
SB - been doing the same for a while...curious are you long on any alt coins? or daytrading everything? I wouldn't consider myself as daytrading or even a daytrader. I've just been in the right place at the right time the last few weeks. First it started with a payout, letting it sit a couple days and getting lucky with BTC going up from 9k to over 15k. A few days later, another payout when it was around 14k and it went to 19k+. After it hit the ceiling, I had cashed everything out that I had into a USD wallet. Most of it I withdrew to my account and left some of it in there to possibly play with. The last week the bottom fell out, so I watched closely for several hours. Watching a few groups on FB and Twitter, and when BTC hit around 10k, I was thinking it was time to dump back in, but wanted to wait and see if it went lower. It held for awhile between 10-11k. Finally I said what the heck, dumped everything I had from my wallet into BTC and then even transferred more from my personal account into BTC. From there BTC went back up to 14k or so and then came back down to 12,500 for a few hours. Almost pulled then, but was patient and sure enough it went back up to 16k, watched it for a bit, and then cashed it all out back to my wallet. Most of it is out of my wallet, but have about 2500 I made the last week or so to see if BTC drops back down. As for alt coins, I am in a few that I will leave till the end of the first quarter at the least, but will keep an eye on them. Currently sitting in Tronix (TRX), Ripple (XRP), and Verge (XVG). I also hold some LTC (Litecoin), which I made a killing on last week as well. Sucker dropped below $200, down to $185, managed to get back in at $198 and sold at $317 a few days ago. It's been anywhere from $280 to $315 since then. By no means am I an expert, just getting lucky and using common sense that I've learned from the real financial market and my brother who is a financial adviser.
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Post by stickbit on Dec 26, 2017 12:15:15 GMT -5
Very nice! I don’t have to knowledge or stomach for the daytrading anymore. Bought a good chunk of Tron and that’s it for now - mainly because I’m very impressed with the founder - Justin. Kid knows what he’s doing so it’s more of an investment in him. We will see how that turns out. Fell in love with ripple back in oct and should have bought it at .24 Can’t believe the run it went on - oh well. Don’t trust it at $1 so holding off there
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dmoney
Premium Member
Posts: 34
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Post by dmoney on Dec 26, 2017 12:55:44 GMT -5
SB - been doing the same for a while...curious are you long on any alt coins? or daytrading everything? I wouldn't consider myself as daytrading or even a daytrader. I've just been in the right place at the right time the last few weeks. First it started with a payout, letting it sit a couple days and getting lucky with BTC going up from 9k to over 15k. A few days later, another payout when it was around 14k and it went to 19k+. After it hit the ceiling, I had cashed everything out that I had into a USD wallet. Most of it I withdrew to my account and left some of it in there to possibly play with. The last week the bottom fell out, so I watched closely for several hours. Watching a few groups on FB and Twitter, and when BTC hit around 10k, I was thinking it was time to dump back in, but wanted to wait and see if it went lower. It held for awhile between 10-11k. Finally I said what the heck, dumped everything I had from my wallet into BTC and then even transferred more from my personal account into BTC. From there BTC went back up to 14k or so and then came back down to 12,500 for a few hours. Almost pulled then, but was patient and sure enough it went back up to 16k, watched it for a bit, and then cashed it all out back to my wallet. Most of it is out of my wallet, but have about 2500 I made the last week or so to see if BTC drops back down. As for alt coins, I am in a few that I will leave till the end of the first quarter at the least, but will keep an eye on them. Currently sitting in Tronix (TRX), Ripple (XRP), and Verge (XVG). I also hold some LTC (Litecoin), which I made a killing on last week as well. Sucker dropped below $200, down to $185, managed to get back in at $198 and sold at $317 a few days ago. It's been anywhere from $280 to $315 since then. By no means am I an expert, just getting lucky and using common sense that I've learned from the real financial market and my brother who is a financial adviser. Buck, what platform are you using for your trades?
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