Mysterious Bitcoin Dip-Buyer Identified

Tyler Durden's picture

Amid the cataclymsic collapse of Bitcoin late on Friday night, the crypto currency suddenly saw a large buyer step in as prices plummeted below $6000. We now have an idea who that buyer of last resort was...

As a result of a giant publicity effort from its proponents, BCH saw mass investment as it heads towards a potentially contentious hard fork set for just after 7 p.m. GMT today. The failure of SegWit2x, coupled with endorsement from the soon-to-be-defunct Bitcoin Classic team meant BCH became the major ‘competitor’ to Bitcoin over the weekend.

But, as Reuters reports, former Fortress macro hedge fund manager Mike Novogratz - who we most recently profiled here - told Reuters Global 2018 Investment Outlook Summit in New York that he bought $15 to $20 million worth of Bitcoin over the weekend in that recent pullback.

The billionaire says his crypto fund 'Galaxy Investment Partners' owns Bitcoin, Ethereum, and many other companies, and coins.

“The institutionalization of this space is coming. It’s coming pretty quick,” he said.

Novogratz said he expects major financial firms will soon start to offer bitcoin or similar products as an investment option, one that could be easily purchased over the phone.

“When it’s that easy, the price of bitcoin or ethereum is going to go much higher. And that is a lot closer than people think,”

His biggest regret this year has been not buying more cryptocurrencies when prices fell, because he knew that they would keep going up. He sees bitcoin, for instance, hitting $10,000 by March.

Novogratz previously said that, while bitcoin is a bubble, the mania is justified, because it is a technological advancement that promises to fundamentally alter our lives.

"I can hear the herd coming" Novogratz said.

And bubble or not, Novogratz concluded eloquently on the extreme nature of cryptocurrencies' potential...

“Remember, bubbles happen around things that fundamentally change the way we live,” he said.

 

“The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”

Bitcoin is set to become "the biggest bubble of our time," he added, and could reach $10,000 very soon due to fast-building interest.

But, we also note that Bank of Japan Governor Kuroda made some fascinating comments earlier that appeared to suggest selling yen and buying bitcoin:

Haruhiko Kuroda says he doesn’t “see any serious problem arriving from cryptocurrencies at the moment.”

 

“We are carefully watching the development,” he says at an event of the Schweizerisches Institut für Auslandforschung on Monday in Zurich.

 

Additionally, Bloomberg reported that Kurodas warned "Japan's high debt-to-GDP ratio is not sustainable."

And as the chart below shows, the buying binge overnight really struck as Japan opened...

This move comes on the heels of American venture capital investor Tim Draper's comments (founder of the Silicon Valley VC firm Draper Fisher Jurvetson) that fiat currencies will no longer be in use in five year's time as they are to be replaced by cryptocurrencies.

At the WebSummit conference in Lisbon, Portugal, he told Forbes the fiat system will eventually disappear as people look toward coins like bitcoin or ethereum. He says its because fiat currencies are bound by country borders.

 

“In five years, if you try to use fiat currency they will laugh at you. Bitcoin and other cryptocurrencies will be so relevant … there will be no reason to have the fiat currencies,” he said.

 

An unabashed promoter of cryptocurrencies, Draper said he fell in love with bitcoin not long after it was introduced in 2009. He bought 30,000 coins in 2014 (at about $600 each); they are now valued at over $214 million.

 

“This is the greatest technology since the internet,’’ said the investor. “This is a sociological transformation, it’s a movement.’’

 

He also said that bitcoin will divide the financial services industry, at least initially.

 

“There will be a few who embrace it and jump out front and say, ‘This is important’ and then there are going to be those who jump back and say, ‘I’m going to cling to the past, and I’m going to hold onto everything I’ve got.’ And you know who wins then,” Draper said. “It’s always progress, it’s always technology.’’

 

Talking at the conference, he said investors should thoroughly study who’s running the ICOs and whether their business plans seem legitimate.

 

Draper has rejected the possibility of the cryptocurrency market imploding like the dotcom boom in the late ‘90s, saying “people are always going to say there’s a problem, and that usually means there’s a lot more upside.”

Finally we leave you with Dennis Gartman's comments tonight on bitcoin:

"this is a market for criminals and millennials."

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Raffie's picture

RELEASE THE HATERS!

johngaltfla's picture

I heard the herd was coming too in the 1990's. LTCM, sold to you.

TeamDepends's picture

In a few short months, you'll realize how lame your comment is.

MagicHandPuppet's picture

This was all prophesized by Satoshi Nakamoto himself, almighty coder of everything holy and with value, so say we all.

Thanks to his coding goodness, Bitcoin is already programmed to be worth billions of dollars... EACH!  There is no stopping the price escalation as it finds it's true, inherent value of infinity.  A single bitcoin could buy the entire planet earth, some day.  It's already in the CODE!

Crisismode's picture

Time to get back on your meds tonight, junior.

 

You obviously have had a serious day

 

when your lizard-brain

 

took your pre-frontal cortex

 

hostage.

 

 

wise_owl_says...'s picture

Capt. T.G. Culpepper nows sees a big 'W"

Steve Scuba's picture

I'm making over $15k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...  http://disq.us/url?url=http%3A%2F%2Fwww.Jobzon3.com%3Ab8eR_DQLwGRPVGtFvv...

Erek's picture

Tell 'em Smiler Grogan sent ya.

jeff montanye's picture

not all bubbles are built around things that fundamentally changed our lives as the tulip reference above indicates.  the mississippi bubble, the south sea bubble, the florida land boom (needed a/c, three decades away), the japanese real estate (and stock for that matter) bubble of the 1980's, most of the companies that formed the nasdaq bubble of 2000 never came back.

but all in all the best one imo is the near $15 trillion in bonds with a negative yield.  that one makes those tulip maniacs look like value investors. 

Bay of Pigs's picture

JFC, Crisismode?

One of the oldest trolls ever at ZH?

JRobby's picture

(uplifting, angelic singing in the background)

Then, the channel changed and Gartman was on the screen prophecies of criminats, etc.

aurum4040's picture

Novagratz is going to lose his shirt litterally on this one. Total incompetence, hubris, he has no clue what happened this weekend. Hes not a tech guy, he doesnt realize he bought 20 million of the most inefficient and technologically disadvantaged crypto, arguably at this point it is fiat. Total incompetence. 

tmosley's picture

Well, not TOTAL incompetence. He didn't just go all in on Bitcoin. Bought other stuff too, most of which is fine.

blentus's picture

And what happened this weekend?

Please enlighten. Thanks.

Golden Phoenix's picture

What really happened is someone got you to trade away your bitcoin and you woke up underwater so you have no choice but to think the qualified billionaire investor is a moron and the guy who is underwater is smart. Actually you do have another choice, you just won't figure it out until you ride BCH all the way down. When you get there tell tmosley we said 'Hey'!

IH8OBAMA's picture

I don't see any investment bank offering any cryptos to customers under the current non-regulatory environment.  They will require an SEC sanctioned 'Safe Harbor" before they will touch anything like that.   Otherwise at the first sign of price collapse the "unsuitable" and "non-disclosure" law suits will start flying and the customers will win every one.

 

wise_owl_says...'s picture

no news, not a peep on litecoin LTC. very likely being quietly bought up with lots of room for growth. 

Bumpo's picture

Why would you go through a "bank" to buy crypto? Unlease you are purchasing directly through the blcokchain, it aint happening. As a matter of fact, that's the whole point.

TeamDepends's picture

"investment bank", "SEC".  Why do you want some middleman molesting your funds?

Skeptophrenic's picture

EXactly!

The Treasury goes to great lengths to limit the size of physical transactions (e.g., largest denomination is $100, etc.) and the IRS goes to great lengths to limit the size of unreported transactions.

Why on earth would anyone think .gov would be complacent with regard to crypto and the anonymity of transactions? It would totally circumvent the system.

Sorry, folks, but that system is WAY bigger than blockchain.

To all the pumpers and crypto gamblers, don’t mind that light way down at the other end of the tracks...

JRobby's picture

CONTROL!!!!!!

Is important to them

Blue Steel 309's picture

I think cryptos are dangerous for several reasons, but what you have exposed is the failure of our so called "legal system".

It is ultimately corrupt. And a big reason for that is the Bar.

Sanity Bear's picture

This is the get the last set of rubes in the door before pulling the tent phase.

shitshitshit's picture

paging tmosley on the white courtesy phone:

Let's do some math here:

$15Mio = 2500 BTC @ $6k

The movements on the exchanges were in the $300-400k BTC or more, so let's assume 100 times more at the very least. So this guy just did a meaningless move in the grand scheme of things. He participated in stopping the fall before it reached $5k (and broke a few hearts) and in so doing he put forward the fact that this would help rising the BTC price to $10k.

What's my take then?

Well, we've seen that the bull market has been suffering from some exhaustion lately, so let the dead cat bounce and hopefully we won't be having a double top then tank. Right now the dynamic seems pretty weak, and absent some good old pumping and a barrage of manufactured overly optimistic news the likes of zimbabwe, ghana, venezuela or god knows what other bona fide shithole with billions to spare, I have trouble seeing were are we going.

What do you think?

The_merovingian's picture

I think you’re right on the exhaustion part. I mentioned it here last week right before the drop and tmosley claimed that I didn’t understand the “S-curve” at the time. It looks like he didn’t understand that there is a difference between price action and the adoption rate.

 

From a pure chartist view, we just finished a magnificent 3 wave rally (textbook style), the most likely outcome will be a ABC retracement before we can reach new highs. A has been retraced and we are currently in the B part. There will be another leg down (C could be as low as 4K) that would be a great buying opportunity.

tmosley's picture

These funds are going to be wiped out.

The BCH hardfork today was designed to sap miners from BTC algorithmically. Essentially, as the BCH price rises, the hash rate will rise as well. Currently BCH is about 20% the price of BTC, and the difficulty has adjusted so that they have approximately 20% of the hash power. Bitcoin will continue to slow.

There is some speculation right now that miners are holding up the hash rate on BTC so they can get their own funds out, profiting off of those coming into the sector, ignorant of the politics taking place. BEWARE.

Also, watch this: https://www.youtube.com/watch?v=OQN8v-8RaN4

Pladizow's picture

This article is bullshit. Novogratz purchase of $15-$20mil would have been OTC, off exchange and therefore had no effect on price!

lenz3099's picture

You sir are a Grade A fucking idiot.

tmosley's picture

Not an argument.

I don't know why people say things like this to me. There is no combination of words you can put together that will hurt me. Saying things like this accomplishes nothing but raising my contempt for you.

If you think I am wrong, tell me WHY.

Pladizow's picture

I'll repeat my comment to your video link that i  posted below: "At the very least he's ignorant. Jeff Berwick is a confirmed conman. Google Jeff Berwick scam. Also Ver sponsors Jeff's Anarcacupulco event, which is know a B-Cash shilling event."

tmosley's picture

That post is nothing but ad hominem. Did you intend for that to be the case?

Not persuasive at all.

Pladizow's picture

Good luck with your B-Trash. No user transactions, No developers, No integrity, No CME futures, No community support, No segwit, No RSK, No Sidechains, No Drivechains. 

tmosley's picture

There are an increasing number of user transactions (https://bitinfocharts.com/comparison/bitcoin%20cash-transactions.html), three seperate dev teams (and a potentially limitless number more--development is decentrilized), "integrity" is not a value you can measure, CME futures are irrelevent, and have been cited as harmful by many here, though I have my doubts about that, there is plenty of community support (see the BTC reddit, among others), Segwit isn't great, I don't know what RSK is, sidechains are also unneeded, and can easily be developed if they are, and Drivetrain will be very lonely with nothing to do if they don't migrate to another coin after the miners leave BTC.

It would have been nice if you had fleshed out your arguments more, but I'll take what I can get.

Pladizow's picture

As only a greater fool argues with a fool, good luck.

tmosley's picture

Why are you giving up? Were your arguments not actually backed up by facts, or even logic?

You will find that I am very vulnerable to arguments backed by facts and logic.

spanish inquisition's picture

Overall, I am not buying the bitcoin algorithm as a medium of independent exchange. As an intermediary, I am thinking that block chain has some value.

You are in a select few on a variety of forums that I can understand that seems to have an analytical educational perspective. Maybe I am drunk on a variety of dubbels and saisons. Or, I am going insane. I joke.

Seriously, I understand more about block chain reading what you wrote than most other sources. And education is what ZH has been about since the beginning. Thank you.

tmosley's picture

Thank you for the kind words. It is good to know that some people appreciate what you have to say.

joak's picture

What I find fascinating with ZH, it's how those people who criticize  (rightly) Democrats, snowflakes, etc.  for their lack of tolerance when people express different opinions do exactly the same. We are here to learn, exchange points of view, aren't we ? I dont agree with many things you say, still you taught me stuffs on cryptos. So yes, thank you for your contributions. 

MayIMommaDogFace2theBananaPatch's picture

This is NOT an argument.

Are you all in?  Or are you fading it?

tmosley's picture

I can't tell which post you are replying to. Could you clarify?

blentus's picture

Arguments backed by facts and logic:

  • three seperate dev teams (and a potentially limitless number more--development is decentrilized)
  • CME futures are irrelevent
  • Segwit isn't great
  • sidechains are also unneeded, and can easily be developed if they are [this is my favourite, I have to admit]

That is lots of facts.

blentus's picture

Hahaha.

Sidechain can be easily developed, indeed.

I mean, a proper team will take only 18 months to design, implement, test and integrate the sidechain.

BCH team will do it in a week :)

Beause they have real Satoshi on their side, right?

Out of curiosity - "CME future are irrelevant" or "sidechains can easily be developed if needed" statements are what you consider to be an argument in a discussion, correct?

stacking12321's picture

partly true.

jeff berwick shouldn't be trusted, but, he's not really a conman - he doesn't deliberately set out to con anyone, he just has lax ethics, loose talk, and doesn't take responsibility for has actions.

i would agree that he gives anarchists a bad name with some of the things he's done.

anarchapulco is NOT a " B-Cash shilling event" as you put it - there was quite a spirited debate between roger ver and tone vays, one of the other primary bitcoin speakers, who took the opposite view from roger. there are a variety of opinions, as with any crowd of bitcoin users.

i've been to the last 2 anarchapulco events, and will go to the one next year as well, there's a lot of interesting people and ideas there, and the weather in acapulco in february is amazing.

i will also bring a saltshaker with me, so that i can take everything i hear there with a grain of salt.