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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BuyBitcoinNowOrCryLaterr's picture

Miners decide

 

No, they do not. The miners make some minor decisions in Bitcoin, but major decisions such as block forks are not at their disposition alone, and this for excellent reasons you'll readily understand if you stop and think about it.

There are two specific methods to control miners on this matter, which will make the scamcoin Gavin is trying to replace everyone's BTC with only replace some people's BTC. The first and most obvious is that irrespective of what miners mine, each single full node will reject illegal blocks. This is a fact. If all the miners out there suddenly quit Bitcon and go mine Keiser's Aurora scamcoin instead, from the perspective of the BTC network hash rate simply dropped and that's all. There's absolutely no difference between Keiser's scamcoin and Gavin's scamcoin as far as the network is concerned. As far as anyone will be able to perceive, miners simply left.

The second and perhaps not as obvious has nevertheless been discussed at length on multiple occasions:

Whoever has enough money to matter is likely to pick one chain for whatever reason, since fork means BTC can be spent independently on either chain he will sell his BTC on one and perhaps buy on the other. As a result prices will rapidly diverge, panicking the mass of users, and the fork is economically resolved.

The situation here is aggravated by the fact that the fork proposed is not simply nondeterministic behaviour, and so the holdings on the two chains aren't notionally equivalent. Instead, all the holdings on the BTC chain are accepted as valid on both BTC and Gavincoin, but holdings on Gavincoin are rejected by BTC. Consequently, everyone involved with the fork is writing options to everyone in BTC, free of charge. That they have no ready way to finance these should be obvious, and consequently the grim prospects of the Gavin side of the fork should be just as obvious. At least, to people who understand economy to any degree.

Now go to your room and continue being a dumb boomer with no Bitcoin as we get richer. Don't forget to keep reading Reddit and watching idiots on Youtube that think they know anything about/matter in Bitcoin.

MGTOW_MONERO_XMR's picture

Old dinosaurs that are hurt their gold doesn't give them yield

Raffie's picture

http://onlygold.com/m/Prices/Prices200Years.asp

Looks like 2012 it was over $1600, they should have sold. 

One day it will be worth a little more, but not anywhere in the foreseeable future.

Gold/Silver price is ROCK SOLID through the decades....

losses mount's picture

I owe you an apology from a while back when I accused you of up voting yourself.

The comment was never meant for you.

In anticipation of my apology being accepted I have already removed said crayons, I hope that's alright with you.

nmewn's picture

You will let us "old dinosaurs" know when the yield is paid out in BitCoin, correct? ;-)

GreatUncle's picture

It is one thing putting value into a system a whole other matter getting it out :-)

The moment they do as you put it "get paid the yield" watch the banks / government crush it just to ensure the masses do not take it up.

USA USA's picture

Never mind....A waste of my time.

Kind of like this DAMN dupe!

USA USA's picture

Never mind....A waste of my time.

Oswald did it's picture

Monero take the number one spot in crypto by 2019, if not sooner  

tmosley's picture

Your fingertips to God's ears. Don't even own much, but that would be just great.

lasvegaspersona's picture

Into 'dollars' ....funny the price never changes but I HEAR THE USG WILL ACCEPT THEM AS PAYMENT OF TAXES...

EddieLomax's picture

Dear Mike,

I wouldn't buy bitcoin at $10 let alone $10000 dollars.

Signed

A sane individual.

Ink Pusher's picture

I don't "hate" crypto. I loathe the incredible collective stupidity of everyone who got sucked into buying it.

One scam is as good as the next and a con game is a con game regardless of what the con is pushing.

It's not a coin, it's not currency and it certainly isn't stable or evaluated realistically.

It took 10,000 BTC to buy a large pizza on the very first transaction. That's the real value.

 

rtb61's picture

Not a problem. Their interest, represents one thing and one thing only, they like the high volatility of bitcoin and the ability to hugely impact the price with little investment. This will enable them, with a much higher that average capital investment (forget about your tiny investments you silly nothings), to drive the price up (by purchasing at the correct times and basically mass marketing and promotion), sell down their investment and then drive the price down (by selling at the correct times and basically mass marketing and promotion).

They will be able to largely control the price of bitcoin and basically using that high volatility to milk you suckers dry. You might think you can hold out but those arseholes will keep doing and doing and doing as much as possible, until bitcoin finally collapses under the assault (they don't care, they will have squeezed as much profits out of it as possible and basically their attitude ha ha suckers).

Keep in mind those fuckers basically bankrupted your country and many other countries, due you think they give a crap about destroying your investment as long as they can make millions in the process.

silverserfer's picture

you know its a fraud when they try and call them coins. 

"network ledger software" doesnt suker in the fools quite the same. 

 

"its basicaly an honor system run by nerds and thieves"

YUNOSELL's picture

Not quite what you would want for a stable currency -- no one can argue this, but as an instrument for billionaire hedgefund managers to gamble on? Sure, why not? They've been severely lacking lately that adrenaline rush from high volatility

silverserfer's picture

crypto muppets  DO NOT WANT a stable currency. They want to screw over greater fools and get rich quick. 

Now that said, let the fun begin. 

tmosley's picture

Many do, as I have learned from this BTC/BCH hardfork fiasco. But not all.

The contempt they express for the actual USERS of the coins is ugly as can be.

silverserfer's picture

all the while....    quietly... peacefully.... birds chirping in the background...  YOUR  silver your had sits in someone elses stash just being what it is bought on the cheap.  

tmosley's picture

Your point being?

I don't want that shit. You can have it.

nmewn's picture

Dude, you were one of the biggest silver pumpers on this board a few years back, now you're doing it with BitShit...lol.

To thine own self be true ;-)

tmosley's picture

Silver was the best option that I knew of back then.

Nobody ever made the argument to me that silver would have its bull case hijacked by a distributed cryptocurrency.

People who said at the time that silver would never work were right by sheer luck. My only failure was that I didn't embrace it fully when I first learned about it. I would be a rich man indeed if I had.

Oh, but you were trying to hurt me with words, rather than have an actual discussion. Pity.

buzzsaw99's picture

People who said at the time that silver would never work were right by sheer luck.

egad.

Mr_Potatohead's picture

People who said at the time that silver would never work were right by sheer luck.

Double egad.  He wasn't wrong about silver.  He just didn't realize that the real game was going to play out over a much longer time frame than he originally thought.

EddieLomax's picture

I'm watching all these real investments, either doomsday ones like precious metals or status quo like stocks, not interested in virtual products.  If crypto-currencies are the future then they will be because they work in some way that we all find more convenient and secure then the current forms of money.  

So lets imagine that actually happens.

Now, does anyone really believe that the worlds banks, upon choosing crypto-currencies, would not invent their own one that costs $0 to use rather than trade in the $10000 dollar one?  Why would they go to all the trouble of adding the infrastructure and then give away all the mining profits to outsiders?  This seems daft to me.

And this does happen all the time with paper currencies, in the UK we've swapped out our old £1, £5 and now soon £10 notes because too many people are getting in on the action (counterfeiting).

They can create a new crypto-currency whenever they want, and ditch it whenever they want (only honouring coins up to a certain block for example if someone else gets in on the mining action).  A crypto-currency is useless as a store of value, it is too anonymous, people want to be able to insure it.  And if it is useful as a token of trade then any token will do.

Will sit back and watch to see when this dawns on the bitcoin holders, probably will take another 5-6 "forks".  Personally I'm still though of the opinion the data size and bandwidth costs are just too large to scale up to match VISA etc.

any_mouse's picture

Bitcoin is built with cheap energy and cheap internet.

The delays in transactions are unacceptable to replace the quantity and ease of fiat based transactions.

Waiting in line at the coffee shop for a miner to process a bitcoin transfer. At what final transaction fee?

kochevnik's picture

True.  Buy your coffee with troy ounce gold bars.  Much better flavor

OverTheHedge's picture

No one would ever dream of owning a single stock forever, (except Apple, obviously), so why can a man not change his enthusiasms when it comes to cryptocurrency?

Bitcoin is best until it isn't, whereupon move to the new best. Simple. Why all the ragging just because you changed your mind?

tmosley's picture

Cognitive dissonance. Happened when I switched from PMs to cryptos too.

Endemic madness of the great bald ape of the Sol system.

Two Theives and a Liar's picture

Just don't get caught up in the survivorship bias t. 

Be right, sit tight. Sometimes patience is rewarded. 

Stacks and Crypto are all viable and will co-exist. 

I enjoy these lively Crypto discussions!

Golden Phoenix's picture

Some people think playing 'chicken' with a semi is smarter than just taking a different and faster route.

Feant's picture

I don't think the dude understand the concept.

I pissed someone off. Got the Banhammer on HRH Feant2.

tmosley's picture

What have you been doing aside from attacking me?

You haven't been using sockpuppets now, have you?

Feant's picture

Other than the N-word and calling you out for being a solipsistic asshole?

Just another day.

As for sock puppets I am guessing you like cum socks. Not my thing. I don't need them or use them.

tmosley's picture

Hahaha, guess a Tyler likes me!

Your ridiculous, argument free attacks have hurt no-one but yourself, it seems. Yet I suspect that you have learned nothing from the experience.

That SHOULD disturb you.

Bendromeda Strain's picture

Talk about learning nothing. I just read a conversation where BTC was being trashed for a lack of transactional utility, and the response "so what, it's a store of value" .

Trolololol

 

Two Theives and a Liar's picture

Seriously. My wallet plays nice with my stacks. What's the BFD?

Agstacker's picture

You can't have a rational conversation with an emotional investor, which mosley obviously is.  Just look at the sheer amount of comments he's made in this thread!

Raffie's picture

So buy into Litecoin. Its real stable.

All your crying is only gonna get your keyboard wet.

silverserfer's picture

the closest I got into the crypto craze was shares of NVDA. 

 

My tears are from laughter at how maniacal you crypto-muppets have become.

Raffie's picture

we know your a pillow biter as well.

The more you say its fake does not make it true at all.

Watch, 5+ years from now cryptos and all of us who bought in at ground floor will be doing early retirement and living the good life.

You how ever, will still be emptying the grease traps at Burger World.

Bendromeda Strain's picture

You will be the slave. Then you will die. Then it gets worse.

Rick Cerone's picture

Sorry, but the CORRECTION is still happening.

It wont end for 3 more weeks.

Don't buy and regret.

40% correction from the ATH is happening.

bugs_'s picture

Not up to the standard of the McAfee Challenge.

TRM's picture

I really hope he has a pet chicken named Richard ....

saldulilem's picture

I like this game

Dragon HAwk's picture

Sucks when you can't sell without destroying your own fortune.

paint it red call it hell's picture

Institutionalized tulip bulbs, what will they think of next.

Rick Cerone's picture

If most people sell half at 5100, you'll start buying at 4600,