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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Falconsixone's picture

He bought 30,000 invisible coins .... fix it

0valueleft's picture

15-20 million, that's a lot cheaper to manipulate than some other markets I know!

Catullus's picture

The bigger fool investment play

DrumpFired's picture

BTFBCD. It is. Shepwave buying it. 

Wise Gold's picture

Rumor is that they are going to begin analysis on Bitcoin.  

stateside's picture

Institutions making it easier to buy Bitcoin will be good for the price of Bitcoin heh?  Gee, that's what they told me would happen to the gold price once GLD was established.  All that did was suppress the gold price and permit specs to buy paper gold in lieu of the real stuff. Be careful what you wish for. 

tmosley's picture

The miners and other whales are going to use them as bagholders before allowing the BTC hash rate to strangle to nothing, leaving behind a dead coin and a LOT of disappointed Wall Streeters.

Unfortunately, a lot of regular people will get hurt by it as well.

Exponere Mendaces's picture

Interesting. Thought you were just scalping BCH, not actively jumping on the bandwagon.

That's your choice, but I don't agree.

There's a reason none of the prior attempts gained traction (XT, BU, etc..) and this time isn't any different, even though there are more pumpers out there.

Never figured you for a Roger Ver and Jihan Wu supporter - care to elaborate if that's true?

 

tmosley's picture

>Never figured you for a Roger Ver and Jihan Wu supporter

I'm not. Appeals to authority never did much for me. I like arguments, and the arguments I have seen in favor of BCH have been very compelling, while those against, aside from those you have presented, seem to consist mostly of autistic screeching (see above).

Unless BTC can get those fees down, it will go up to a tremendous height and then collapse, as currencies that cost a thousand dollars to transact (not even hyperbole as the situation gets worse) are completely worthless.

iLLivaniLLi19's picture

I probably have Aspergers, not autism. But I do think I’m smarter than you. You are speculating that once the institutional money flows in it will seize the network? I don’t think so. Transaction fees are moderated by what people are willing to pay. You seem to think BTC whales are just waiting for an “IPO” then they are gonna rush for the exit at the same time for some reason.

tmosley's picture

>I probably have Aspergers, not autism

Wasn't talking about you, but thanks for sharing.

>But I do think I’m smarter than you.

Great! I like people who are smarter than me!

>You are speculating that once the institutional money flows in it will seize the network?

No. I am suggesting that with the miners fleeing for BCH due to the higher profitability that has been worked in to the protocol, freezing the network.

>You seem to think BTC whales are just waiting for an “IPO” then they are gonna rush for the exit at the same time for some reason.

Just reporting on what I have heard. The reason is compelling--the miners want more transactions so the value of the coins they mine and own will go up. BTC Core seems hellbent on capping transactions and destroying the coin. The motive is there, but whether there is actually a conspiracy in that vein, I can't say.

Golden Phoenix's picture

Current transaction count 7 days

BCH 106.28
BTC 2205.16

 

Exponere Mendaces's picture

You do realize the fee increases were due to direct campaigns to flood the network?

Looking at the charts for mempool usage makes it pretty clear, especially the "cliffs" when they have to recharge their wallets for another salvo.

I'm aghast, honestly - by backing Roger Ver and Jihan Wu, you are tying your flag to a duo that have consistently shown they are making a power-grab, not crusading for improvement.

Do what you wish, of course.

The tides will change quite dramatically after the CME contracts start trading, and institutional players drown out the small purses of Ver and Wu.

tmosley's picture

Attacks on their network just speed up the inevitable process. Fees were ridiculous already before the attack. And not really sure it if WAS a transaction spam attack rather than simply miners jumping ship.

Also, I told you already I don't back people, I back arguments and technologies. BCH makes a good argument. It's technology is not as good as other alts, but the other alts don't have a chance of dethroning BTC before even more money gets trapped there in the pit of ever increasing fees.

Bitcoin Core abandoned Satoshi's roadmap and went off on a weird tangent that has resulted in HighFeeCoin. https://www.youtube.com/watch?v=UpskCdwc54o

Exponere Mendaces's picture

Never thought you'd get sucked into that rabbit-hole.

So be it, there's plenty of evidence to the contrary. You've accepted their "arguments" and now - you assume their risk, too. Never mind that during the difficulty adjustments BCH fees were upwards of $40 a crack. I know they've forked (again) to change things, but you'll see that the system they've envisioned doesn't scale well.

Its like Andreas says - its easy to claim low fees and empty blocks when no one is using it. When the real scaling problems come for the alts, they'll have to work through it to find solutions. Segwit enabled services and wallets are sending transactions much lower than BCH, and will continue to do so.

I suppose you'll see that over time...

 

tmosley's picture

>So be it, there's plenty of evidence to the contrary

Would be nice if you would recap. All I have seen is ad hominem and personal insults.

>I know they've forked (again) to change things, but you'll see that the system they've envisioned doesn't scale well

I think it will scale well enough for now. Their team is nice and decentralized, and will grow over time, with more innovations to come. BCH team isn't afraid of hardforks unlike Core, who seemed to be the only ones breaking consensus.

>Segwit enabled services and wallets are sending transactions much lower than BCH

Great! Where can I read more about that? If they can solve the problem of HighFeeCoin (https://www.youtube.com/watch?v=UpskCdwc54o&t=3s), then I have nothing against it. It's just that the fees were and are ridiculous.

iLLivaniLLi19's picture

tmosley you are being disingenuous. Surely you know Bitcoin would change PoW in a worst case scenario to prevent the Chinese miners from catastrophic manipulation; Core development team would have a lot of support in that case after the miner collaboration attacks. But it’ll never get that far (unless China is willing to pump $100 Billion into it).

tmosley's picture

What evidence do you have that the dev team is willing to make such a change. This is the first I have heard of it.

I would be perfectly willing to support BTC again if they were able to get those fees and confirmation times down. That is literally my only problem with it.

iLLivaniLLi19's picture

Not a lot is written about it because it looks dictatorial on paper but there are whispers on podcasts and vlogs that it’s a last resort if necessary and could be implemented democratically just like UASF.

tmosley's picture

I hope they do it then. All this crap is bad for crypto.

Golden Phoenix's picture

Don't worry, BCH was flushed but there are still a few floaters. They should be washed out in January when Coinbase opens the BCH floodgate.

blentus's picture

You seem to be completely oblivious to the fact that BTC team has stated on multiple occasions (even years ago) they that would do an emergency hard fork to adjust difficulty, if ever needed. Considering how hostile BCH became, this is now starting to look like a serious option.

You keep assuming that there will be no reaction to any actions made by BCH and that everyone will just pack their bags and go home, while letting crooks ruin Bitcoin.

Good plan, I see no flaws.

Please proceed.

Winston Churchill's picture

Indeed, just proves TPTB can already co-opt CCs for their own use.

Just imagine what a CB could do thru' nominee's with an unlimited bankroll.

Its a major Achiles heel, on top of many other I could list.

tmosley's picture

You fail to understand the evolutionary nature of cryptos.

What works one time won't neccessarily work again.

GreatUncle's picture

Now you should mention the "unlimited bankroll" ... is that not QE?

CO2isLife's picture

 

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

 

Bitcoin will never fundamentally change the way we live. Bitcoin will never be a viable currency. The only real value of the Bitcoin today is that it is volatile and people like betting on the volatility. The volatility prevents it from ever being a viable currency. Don't confuse blockchain with Bitcoin. Blockchain may change the way we live. Bitcoin won't.

GreatUncle's picture

I see it as a viable currency (actually a mechanism) to avoid the banks.

Take 2 large business trading with each other buying and selling so more of an exchange.

Well if you set up you own crypto currency you only ever settle the difference in $, rest is now crypto.

Then expand it to one or 2 more businesses no more bankster cut especially if the system fully implements NIRP.

TRM's picture

Correct you are. Now the blockchain technology that is under the hood. Now that has some serious disruption potential.

Feant's picture

Not true. BTC was created as an end run around banks, around inflation around, gold.

I remember listening to the people that developed BTC back in 2009. Fuck what the hell were some of you people doing back then?

I can tell you what I was doing. I was building a custom PC gaming rig and listening to talk radio. Specifically FreeTalkLive on the weekend!

I remember when they bought pizza with BTC! They talked about it on the radio show! Fuck some of you are such idiots.

When did all of you whores show up because I can't get the skanky smell off of me with an hour-long hot shower!

USA USA's picture

Bitcoin already has! Look at the time we are all wasting debating it......

HappyDeathMetal's picture

Its a store of wealth, digital gold...king of cryptos!

maxblockm's picture

I wish I could find the exact video, but Andreas Antonopolous talks about this perception and scoffs at it. He said BTC is the blockchain.

any_mouse's picture

Blockchain is the Technology.

Blockchain is a protocol for communication/transmission of immutable information concerning an object.

The world wide web is built on hypertext transmission protocol (http(s)). The transmission of HTML objects.

Bitcoin is an application built on Blockchain. Bitcoins are the object.

The application happens to be a digital currency.

Ink Pusher's picture

My blockchain munching search and destroy worm is nearly complete. I am thinking about releasing it for free.

NoBillsOfCredit's picture

It is not a currency, it is used as money. Something to trade with. But...you can lead a horse to water but you can't make him drink.

harleyjohn45's picture

How do you finance a car with bit coin?  I know of no one on my town who accepts bitcoin or any of the other various cyptro's.  Methinks someone is going to get a royal screwing on cyptro's, and it won't be the fat fingered traders.

blueskyranch's picture

My point has always been - offer your banker a jar/bottle/bag of air for payment. Bitcoin is air (actually humans need air and BC is less than that).

NoBillsOfCredit's picture

So, why do you have software on your computer? "It's just air."

That was a question to get you to stop and think. Software has value, like anything else, because of its utility. Crypto money is software. Why can't you, a user and purchaser of software, not see that?

USA USA's picture

As of today, you cash it out and use old fashioned cash.

Kind of like you would do with yellow metal, not many dealers take that either!

NoBillsOfCredit's picture

Finance a car? That is coming. Buy stuff in your town? That is coming. Some people go kicking and screaming into the future.

Conscious Reviver's picture

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

Tulips?

USA USA's picture

Novel reply! Thought long and hard for that one, huh?

. . . _ _ _ . . .'s picture

Tulips are a major tourist attraction for Holland, as well as being a huge export market for the Dutch. The bulbs were even eaten in times of famine.

Just making a point, but I don't think he really meant every single bubble ever, without exception. So binary.

max2205's picture

If it moves enough Whore St will trade it 

Rick Cerone's picture

This bald headed cunt is trying to steal your money.

Consuelo's picture

 

 

That's what 'animal spirits' are all about...