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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runnymede's picture

I hope this is not new news to you

NoBillsOfCredit's picture

What is money? A tool...you obviously like easily counterfeited in unlited amount IOU nothings over something that is limited, costs a lot of work to produce and cannot be counterfeited.

The Count's picture

Am I the only one sensing a colossal scam unfolding?

blueskyranch's picture

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

 

Yep, he bought thin air. Wait till his investors see the real 'DIP' in prices (soon).

mototard's picture

Off topic, but the Canada Revenue Agency (read IRS) is going after Canadian PayPal users.

QUOTE:  PayPal has received a Federal Court order, which requires us to disclose information to the Canada Revenue Agency (CRA) about PayPal Business account holders that have received or sent a payment through their account between January 1, 2014 and November 10, 2017.  ENDQUOTE

 

Source:   https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq37...

Consuelo's picture

 

 

Actually, yours is not off topic - quite the opposite in fact.   After all, it's the IRS.   And that means anonymity-persona-non-grata...  It means total and complete transparency if you're a business, else you run afoul for tax evasion or fraud.   It means a record of all transactions if you intend to stay in business.   It means...  You're in the system - their system.   And if you're not, you're on the wrong side of legal.    I'm still trying to wrap my head around that aspect, whilst juxtaposing it against all this anonymity and freedom we're being promised with cryptocurrencies.

runnymede's picture

If it can be weaponized, it will. If it can be monetized, it will. It's what humans do best---get it, then protect it. Blockchain in the State's hands......

Greshams Law

USA USA's picture

Crypto threads are so much more fun than war and politics!

tmosley's picture

They are, aren't they? I kind of hate that everyone gets drawn in here to bicker, but I just can't resist them.

To be honest, the future of money is probably a lot more important than current wars or current politics.

runnymede's picture

Blockchain may or may not change the world. Thats well above my pay grade. Like any new technological advancement, it will be first deployed for it's most base purposes--as a weapon; and a monetizeable speculation tool. The latter is upon us, the former---not as of yet. Maybe globalism/collectivism will unleash the power of blockchain as a weapon under the guise of eliminating counterparty risk--and (even) risk altogether. Central planning cannot coexist with spontaneous human interaction. 

Gresham's Law is immutable, as long a humans are as presently constituted. 

Or perhaps technology will fill in all those pesky gaps and clean up the messes humans cannot seem to avoid leaving behind when they're done doing their business. Maybe we can make ourselves useful enough to nature to stem what is increasingly looking like an imminent thinning of the herd. Maybe an expert can read the algo tea leaves and see what they have determined is my usefulness and what they have planned for me.

hidflect's picture

At first I thought you wrote, "That's well above my gay parade." Ahaha. Need my eyes checked.

Two Theives and a Liar's picture

I know people who will blow 5 grand taking the Jets and the over on any given weekend (No not 1%ers either...Jersey boys..Fugheddaboudit!) So in light of that...ya do some homework and get in the crypto game.

Why not? Buy the ticket, take the ride, and learn. 

The stacks are still there...looking all shiny..no problem.

Married to Phyzz, having a fling with a crazy Crypto hottie!

 

runnymede's picture

I've had a blast. Done nearly all the things I've wanted. I'm in the bottom of the 8th inning and now I like to just sit and watch and appreciate the game as it hits the climax, where every move is magnified. I actually do know a bit (!) about btc and blockchain. I've spawned a techie and I get my edumacation on it from her. I'm just more interested how the rubber hits the road, and what homo sapiens will actually do and say to serve themselves a heaping helping.

MagicHandPuppet's picture

"Gonna buy in when when dem digibits drop back down to bout tree fiddy."

Grandad Grumps's picture

The only way to legitimize these Ponzi schemes is to make it part of the IMF basket of currencies.

hidflect's picture

Lots of people buying Bitcoin but no one using it. Almost as if they were tulip bulbs or something...

tmosley's picture

At these prices, no-one can afford to. Only "useful" to speculators, and only because of all the poor rubes flowing into BTC via fiat gateways. Those exchanges can afford to send BTC out to private wallets (mass sends are much cheaper per recipient), but you can't afford to send them back. If the cash keeps flowing in, the price will keep going up because the supply of coins on the exchange is decreasing as new buyers move them to their own wallets.

Hotel California.

Flankspeed60's picture

Bingo! Supply also decreases as the mining solutions become exponentially more difficult. Eventually, could take a Watson a month to produce a coin, making it a billionaire's private currency. What to do when there are no muppets to offload?

HappyDeathMetal's picture

I bet the run up in Bitcoin's price in 2020 will be epic as the value should about double as the mining rewards are expected to halve around that time.

Cabreado's picture

Hedge funds aren't in the business of caring about fundamentals, they are in the business of cheating them.

With regards to a Currency... go get your crypto-advice from this guy, then...

ElTerco's picture

Once again, 100% of the value proposition of Bitcoin and other cryptocurrencies is tied up in marketing. That is the only intangible collateral that backs this fake money at the moment, if you can call it collateral.

tmosley's picture

Not 100%, but psychology (marketing) is a very large part of what drives the value of the coins. But it mainly drives allocation within the space, not so much movement into the space itself.

ElTerco's picture

Once governments adopt a crypto, or alternatively some sort of reserve assets are used to fully back a given crypto by law, my mind will change. Until then, I am wary.

Golden Phoenix's picture

That kind of statist attitude explains the avatar at least.

blentus's picture

Don't forget the faith.

I fucking hate all gods and religions, but I do have faith in blockchain technology.

Hallelujah

venturen's picture

Should rename it Bitair...because that is what you own....a bit of air

Yellow_Snow's picture

Long Bitcoin !!!

Screw Banksters

fearnot's picture

 

Control the Future - Blockchain - Taxes and Bitcoin paying for A.I. - Kushner, Saudi Arabia connection - A.I. creating blockchain - Putin "whoever controls A.I. will control the world"

A.I. “Sophia” just began creating crypto currency. "Sophia" developed by Hanson Robotics, Singularity Net.io and now a citizen of Saudi Arabia just went online & began creating crypto currency by Hanson Robotics, Singularity Net.io.

Coming to a propaganda machine near you:  “We need an American Crypto dollar”. This mantra will be begged for by Americans after the crash of the dollar. Seems like it is on the way whether the CIA psychopaths win or “White Hat” Pentagon MIC wins.

 

Kushner Companies tied into Github (Peter Thiel also tied into Github as shown below)

https://www.forbes.com/sites/stevenbertoni/2017/04/10/josh-kushners-complicated-world-how-jareds-brother-runs-a-billion-dollar-fund-in-the-age-of-trump/#78116edef240

 

Github – Founded by Tom-Preston-Werner and  Chris Wanstrath Feb. 8, 2008 - Where all of the block chain code in the world is stored. Eight years after its founding, GitHub boasts an estimated $2 billion valuation and has hosted more than 48 million coding projects. Its clients include NASA, Microsoft, Walmart and the U.S. and U.K. governments.

https://github.com/features

 

Quinn Michaels  U-Tube– listen to 1st 20 minutes; Bitcoin created by A.I. for A.I., Ties Kushner Companies to Github; A.I. robot “Sophia” now a citizen in Saudi Arabia began creating crypto currency by Hanson Robotics, Singularity Net.io

https://www.youtube.com/watch?v=YSn7Iomisyc&app=desktop

 

The Singularity Summit is an annual conference on science, technology, and the future co-produced by MIRI and Singularity University. The conference was founded by MIRI, Ray Kurzweil, and Peter Thiel in 2006. The inaugural conference was held in 2006 at Stanford University. Past speakers at Singularity Summit include inventor and futurist Ray Kurzweil, philosophers David Chalmers and Nick Bostrom, nanotechnology pioneer Eric Drexler, author and scientist Douglas Hofstadter, Paypal co-founder Peter Thiel, Sebastian Thrun of Google’s driverless car, roboticist Rodney Brooks.  A.I. “robot” “Sophia” now a citizen in Saudi Arabia began creating crypto currency by Hanson Robotics, Singularity Net.io

https://intelligence.org/singularitysummit/

 

https://blog.singularitynet.io/

https://sofrep.com/tag/palantir-technologies-inc/

 

adr's picture

I remember that thing called Ginger that was going to change the way cities were built and remake humanity. A total disruption of every industry. 

Anyone that thinks every currency on Earth will be replaced with cryptos is insane. 

Morons buying .001 Bitcoin to get in on the fad made a handful of people a lot of paper cash. As was the plan. 

Pitty's picture

Yah sure the world governments will just let their fiat power go away, of course Kuroda says it's no threat because he knows its pure tulip mania sure to disappear, of course after making 214mln you would be a hubris filled zealot, physical metals because when the lights go out and surely they will you will sit there and melt realizing you got suckered when the lights come back and gold and silver go up exponentially with the inevitable debt currency reset if they can plot and do 911 30 years later you really think they will give power to the people with cryptocurrencies, those in power are laughing at you poor crypto fools, they are the ones that will pull the grid plug, they are floating this predictive programming of the coming grid collapse everywhere as they buy up all the cheap gold and silver for their coming planned collapse usual asset power grab, blind fools don't you read human history/human nature, poor dumb man doomed to repeat, enjoy your short term trading digits that will inevitably go poof

cornflakesdisease's picture

Dollar Inc will not let anything threaten their crap table, not even bit coin.

P4K's picture

We hate the guy who builds re-usable rockets, high-performance electric cars, and photovoltaic roof shingles, while we must worship the guy who develops a scheme whereby everyone is incentivized to mine bitcoins for $6000 worth of electricity so we can all be charged $6 a pop to do transactions with each other on a distributed ledger someday, maybe. Brilliant. Bring on the downvotes.

Golden Phoenix's picture

We hate the guy who uses tax grants and credits taken at gunpoint from the guy who can't afford to buy any kind of car so the guy who wants to buy a $50,000 one can get a smoking deal. We hate the guy who convinces municipalities to build parking lots with free chargers at the expense of other taxpayers so he can promise his customers free energy for the life of the vehicle. We hate the guy whose company was essentially pre-bailed out by the public but is still pissing away so much money his urine must be getting bloody. 

Most of all we hate people so stupid they think electricity just magically appears at the plug and all of the above are good things.

moobra's picture

Cryptos will fail because they just won't scale. The whole point of blockchain is that EVERY node processes EVERYTHING to preserve integrity. At some point the chain will be so enormous that parts of it must be done off chain, delayed, segmented, partially verified etc.

I believe VISA processes 3000 transactions/sec and BTC does 3/sec. As the chain grows in scale and complexity it will get worse.

Of course some coding genius is expected to solve this but in the end it sounds like centralisation loses on integrity but wins in processing speed. Pick which one you want: an safe system that is too slow to pay for coffee or an unsafe system where you don't mind if the $2M takes 20 mins to process. No panacea.

In the meantime there is plenty of tulip bubble to go.

As for railways and others being a bubble too- maybe but in the collapse someone might have had some locomotives and track.

Cryptos are a vacuum.

Jdillinger's picture

Your forgetting the processing power is also increasing exponentially as well.

See Moore’s law for details. After an initial lag it will keep up with demand. We just have to allow for the infrastructure to develop with the technology.

moobra's picture
Why isn’t the blockchain scalable?

Currently, all blockchain consensus protocols (eg. Bitcoin, Ethereum, Ripple, Tendermint) have a challenging limitation: every fully participating node in the network must process every transaction. Recall that blockchains have one inherent critical characteristic?—?“decentralization”?—?which means that every single node on the network processes every transaction and maintains a copy of the entire state.
 
While a decentralization consensus mechanism offers some critical benefits, such as fault tolerance, a strong guarantee of security, political neutrality, and authenticity, it comes at the cost of scalability. The number of transactions the blockchain can process can never exceed that of a single node that is participating in the network. In fact, the blockchain actually gets weaker as more nodes are added to its network because of the inter-node latency that logarithmically increases with every additional node.
 
In a traditional database system, the solution to scalability is to add more servers (i.e. compute power) to handle the added transactions. In the decentralized blockchain world where every node needs to process and validate every transaction, it would require us to add more compute to every node for the network to get faster. Having no control over every public node in the network leaves us in a pickle.
 
As a result, all public blockchain consensus protocols that operate in such a decentralized manner make the tradeoff between low transaction throughput and high degree of centralization. In other words, as the size of the blockchain grows, the requirements for storage, bandwidth, and compute power required by fully participating in the network increases. At some point, it becomes unwieldy enough that it’s only feasible for a few nodes to process a block?—?leading to the risk of centralization.

Feant's picture

A decentralized currency was the whole point behind the creation of BTC.

So no one person or country or entity could control it.

The speed of BTC creation was always going to slow. So what?. That has nothing to do with the confirmation of existing BTCs. I think many people are confusing these.

MagicMoney's picture

He is not talking about the creation of new BTC. He is talking about the maintenance of the ledger. The actual transactions. You obviously have no clue what he is talking about.

Golden Phoenix's picture

He's not talking, he's cutting and pasting.

Golden Phoenix's picture

One can presently technically run a full bitcoin node and more on a Raspberry Pi at $11 plus an SD card.

BCH tried to convince everyone Segwit 2x was desperately needed but BTC has 1x and only 10% of current BTC traffic is Segwit. The true capacity of BTC is currently 90% underutilized. 

Who is responsible for spamming the blockchain with junk transactions, depriving the network of capacity at the resulting critical time, and the 90% underutilization of Segwit 1x? The miners sabotaging the network then complaining it was inadequate so they could dump their BCH at a high price prior to the difficulty adjustment and the release of Coinbase BCH. After finding their bagholders they're back mining BTC without a peep of complaint.

moobra's picture

I farked that up. I meant an unsafe system that takes 5 secs to process 2M vs a very safe system that takes 20 mins.

I don't see cryptos solving the scaling problem for real time trabsactions in commerce. For large transactions that are not time critical e.g. a large contract deal worth millions, then OK. But it would still have to be time competitive with other systems like SWIFT.

Otherwise hedging issues would play a big part.

So maybe ethereum has some legs given its emphasis on contracts.

Certainly, inventory control via blockchain has great potential in warehousing etc.

However in both these applications it is just a methodology i.e. blockchain that is being applied, not really a currency.

Can you really call a methodology like double book acccounting a currency?

No more than you can call VISA a currency. It's just a method of transferring fiat and only for as long as governments tolerate it.

A new CC company opens each week. And so do cryptos.

The real winners will be those companies that sell blockchain implementation products for inventory control.

The prtense of a currency is allowed as long as governments allow it to interface with the fiat system but if it gets used too much

for laundering (which as we know is the prerogative of govt) then it will be declared illegal, the moms n pops will pull out and 

leave it to the drug cartels as one alternative to laundering thru casinos, brothels etc.

HappyDeathMetal's picture

You can spend them on a credit/debit card through companies like tenx, monaco, centra and others.

tmosley's picture

IOTA scales infinitely. DAGs are probably the future.

kc_kilo's picture

Forbes summarized it nicely: 
"In its current construct, design, and roadmap, the BTC community is focused first on keeping Bitcoin decentralized so that it can remain as a public, permissionless, highly censor-resistant network that anyone in the world can use and build on top of. Fast, cheap payments are a secondary priority.

In contrast, the BCH community is focused first on enabling fast, cheap payments over the network. The BCH community believes that by focusing on these features, BCH will onboard more people and this increased adoption will foster decentralization."

tmosley's picture

The problem is that high fees kill the coin. People buying it are going to wind up getting trapped.

Honestly, I am surprised that it has taken this long for someone to make a coin with the direct intent of killing bitcoin. They have made it far too vulnerable by refusing scaling. All these transactions should be processed!

kc_kilo's picture

Was surprised you moved from btc to bitcoin cash

Pearson365's picture

So how do you buy iota?  The recommended exchange blocks US users.

tmosley's picture

You can get it on binance.