Mysterious Bitcoin Dip-Buyer Identified

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."

Comments

Gone Galt Nov 14, 2017 10:59 PM Permalink

What a bullshit story.   The dip buyers were smart traders who used a modicum of TA and found a great place to pick up cheap BTC, which were subsequently unloaded in the last hour.  You're welcome.

CPL Nov 14, 2017 9:05 AM Permalink

Wheels fall off the cargo wagon in two months and this is all over for all of you as there will no longer be a vechicle to continue 'planet earth'.  All of it.For those that would like to extend their play time during transitions please deposit another 100 bitcoins in the wallet below.  For those that would like to inquire of the purchase of the children please send an email to compubuddi@gmail.com.  We have all bloodlines since they were foolishenough to deposit their children here assuming here were open ended protections.  Since I have not been paid, your decandants are now for sale direct or will be found in the Dubai slave markets on an open bid system with bids starting at .05 per unit.  If wishing to purchase a family blood line, then it is best to contact me prior so all the same genome/family tree can be purchased forsale as a package as the slave vendors don't deal in their business that way.Current specials available are the Patel family available as one unit.  Suitable for mining, hard labour and fucking.  All the women and children have been baselined with the old CIA pussy cat reprogramming so they all fuck, clean, cook and serve.  The men have been broken properly using old Jesuit reconditioning and the agressive nature of the Patels has been broken.   For all 340 Patels as one package, it will cost 12 BTC to obtain a brothel and mining staff in one purchase.  Plus you can breed them and make it all back. 1JdRM74wtrBDZbu8n2aUPP3bLrCtEFFuM8

Northern Flicker Nov 14, 2017 8:16 AM Permalink

I have several reservations about bitcoin I would welcome comment on.1) Cliff High talks about bitcoin moving into an early adoption phase (soon) when it will really take off.  However, normally that phase is accompanied by lower prices.  At the present rate, the BTC price will be going thru the roof.  I don't see that attracting a wide market.2) I can't see how the slow transaction rate will ever be solved with BTC (maybe some other crypto?).3) The high price of bitcoin will limit it's use.

silverer Nov 14, 2017 7:54 AM Permalink

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

Digital currency, the new billionaire's playground. Enter at your own risk.

Decoherence Nov 14, 2017 6:44 AM Permalink

With no regulation in this industry, this petrified fool could have agreed to buy and sell back and forth with another fool like himself for hours on end until the price was back up to where more fools were comfortable entering the market.  Like thirsty wildebeests drinking from a crock pond.  I think that is the animal instint he's trying to instill in others.  I've tried to fall in love with Bitcoin but just can't shake the feeling this is going to end in tears for many people.  I wish I bought it at $600 a coin, but at 6-7K a coin I think it's madness, although this may very well go higher.  As this gets more and more expensive and volume grows, it will take more institutional buyers to keep driving the price up because no one else will be able to afford it.  If more and more capitial is taken out of markets, there will eventually be zero return on capital for businesses transacting in fiat.  If that happens, governments will have to buy out Bitcoin and adopt their own as a national currency to save businesses, otherwise there will no reason for anyone to take on risk by borrowing money from banks and operate a business because the real return on capital will never outpace inflation.  And there would be no reason for banks to loan money and take that risk; then markets freeze up.  if that happens, governments won't be making any tax revenue because it will be locked up in cybperspace and non-bitcoin owners would be in abject poverty.  So what would governments have to lose at that point?  Either way they go broke and watch their spenders and corporations die off in poverty.  The only way I see this working out for Bitcoin investors is if the government makes their own crypto and agrees to buy out every Bitcoin owner at elevated prices in exchange for forcing them into their own new government digital money they can once again manipulate and be happy with.  OR maybe we are truly watching the end play out right now with crypto.  The real problem is the US is bleeding out because oil is too expensive to extract.  Compounding debt for energy companies and soon to be diminished oil reserves.  Without energy, there is no economy.   

Panic Mode Nov 14, 2017 4:04 AM Permalink

It will go crypto for sure, no doubt about that but it won't be your beloved crypto. The gov & banks will use their own cryptos to front run everyone.

any_mouse Nov 14, 2017 4:02 AM Permalink

Okay, in a nutshell, the thing that can't possibly be fucked with, is being fucked with.

And if Bitcoin becomes unpopular, like AOL and MySpace, Bitcoin will become useless with no miners to provide the blockchain processing power.

Cool. And the Bitcoin Futures market hasn't opened.

Fireman Nov 14, 2017 4:00 AM Permalink

Now that the Bonanza cattle rustlers are riding roughshod on the plains, high time to get the bovine herd stampeding before the banksters introduce the all new all rigged Fedcon! For the chance of a few virtual bucks the steers will jump the chasm every time.Just can't wait for the cullAuAgPb"All watched over by machines of loving grace"https://vimeo.com/groups/96331/videos/80799353Onward to the harvest of lectric tulips!

just the tip Nov 14, 2017 3:09 AM Permalink

the possibilities really get your animal spirits going.”so.  that's what drives you finance people in the markets.  it finally comes out.  that's really what's going on here at ZH.  which one of the podestas runs ZH?

peterk Nov 14, 2017 3:09 AM Permalink

people think that governments  will allow there GREATEST ASSET.."MONEY PRINTING" to just  be wiped away by cryptos.NONSENSE.OR for that matter that BANKS will allow cryptos to  run their FIAT operations to zero value.right.. thats surely going to be allowed to happpen. 

floosy Nov 14, 2017 2:22 AM Permalink

“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.Yeah OK, silicon valley douche bag.  I'll ask when the local traders around here in the mountains where there is little to no internet access are going to be converting to Crypto only transactions shall I?  Fucking hell, where I live there are plenty of people who won't even do any form of online purchases or banking and they are not alone. Here's the rub...all these Crypto pumpers are tech douche bags that live in major cities where they have fiber and 4G all the time and spend their lives on or around the internet.  There are billions of people who do not.

J Mahoney Nov 14, 2017 1:43 AM Permalink

I may be a dummy but could someone answer one question--- What stops the creator of these cryptos from creating more out of thin air and not telling anyone --sorta like central banks?

Obsidian Samctum J Mahoney Nov 14, 2017 3:49 AM Permalink

The cap for 21 million bitcoin to ever exist is coded into the protocol. To increase reduce that cap would require a hardfork, one which nobody who own bitcoin would agree to as it devalue their holding. If you own 1 btc, would you want to increase the 21 million cap?

Its a lot more complicated than that. I suggest you read the bitcoin white paper and do some research as I thought the exact same thing. I also thought the ruling class will not allow it.

In reply to by J Mahoney

PitBullsRule Nov 13, 2017 11:55 PM Permalink

I remember when they said this same kind of crap about DrKoop.comThey were worth nothing, but people made millions selling them on the way up.  As long as you don't buy at the top, its great.

OccamsCrazor Nov 13, 2017 11:45 PM Permalink

NO !!! NO!!! NO !!!. THIS FRAUD IS A FUCKING LIAR !!!  HIS FUND STEPPED INTO BUY, BECAUSE OTHERWISE HE WOULD HAVE LOST HIS FUCKING ASS IN HIS VERY WRONG WAY BET.  THIS IS NO DIFFERENT THAN THE FED STEPPING IN, EXCEPT THE MARKET IS MUCH MUCH SMALLER AND EASILY MANIPULATED. IF YOU BELIEVE THIS ASSHOLES BULLSHIT, THEN YOU DESERVE TO LOSE EVERY PENNY YOU OWN, BY BUYING THIS GARBAGE.HE WAS SCARED SHITLESS WHEN IT DROPPED BELOW $6000.  HE HAD NO CHOICE, BC HE ALREADY LOST MILLIONS. SO HE DOUBLED DOWN.  THIS FOOL DESERVES TO ROAST, AND CAN"T ADMIT HE HAS NO CLUE WHY IT FELL.  INSTITUTIONALS ARE NOT GETTING INTO THIS SHIT LIKE HE SAYS THEY ARE.  HE"S A FRAUD. A CON MAN. A FUCKING LIAR ! 

fearnot Nov 13, 2017 11:29 PM Permalink

Challlenge : This question is for anyone who has traded gold futures for a minimum of 10 years, actually made money (my experience 38 years) THAT ALSO has jumped into the bitcoin frenzy.Or If Clif High or Bix Weir can comment that would be big.After what happened with price movement in a measly $20M trade in a $100B Bitcoin market - .02% of market cap are you stupid or just full of blind greed in believing you can exit your positions profitably before an "A.I." created bitcoin bankster controlled algo smashes the market.Compare what happened on trading on Sunday, October 12 -13 in Bitcoin where .02% of market cap supposedly moved the market by 30% off its lows to the $4b or 33,000 contracts of comex gold - 6% of O.I.  - that traded in 10 minutes but smashed the price down by only .8%.Volume is Bitcoins enemy.They don't call Bitcoin a crypto blockchain currency for nothing - Bitcoin will chain everyone in at no escape before the crash   

Codwell Nov 13, 2017 11:29 PM Permalink

Simply quite odd that what one might consider smart investors all proceed to tell you all about distributed ledger crypto technology when they are pressed as to why bitcoins have any value.Bitcoins have no relationship to the  value of the technolgy, anymore than emails have value because of the technology of the email system.If someone was really smart they would have copyrighted the distributed ledger codes.   

fearnot Nov 13, 2017 11:23 PM Permalink

Challlenge : This question is for anyone who has traded gold futures for a minimum of 10 years, actually made money (my experience 38 years) THAT ALSO has jumped into the bitcoin frenzy.Or If Clif High or Bix Weir can comment that would be big.After what happened with price movement in a measly $20M trade in a $100B Bitcoin market - .02% of market cap are you stupid or ust full of blind greed in believing you can exit your positions profitably before an "A.I." created bitcoin bankster controlled algo smashes the market.Compare what happened on trading on Sunday, October 12 -13 in Bitcoin where .02% of market cap supposedly moved the market by 30% off its lows to the $4b or 33,000 contracts of comex gold - 6% of O.I.  - that traded in 10 minutes but smashed the price down by only .8%.The don't call Bitcoin a crypto blockchain currency for nothing - Bitcoin will chain everyone in at no escape before the crash   

FBaggins Nov 13, 2017 11:21 PM Permalink

Was bitcoin hacked and is that why it fell? Perhaps if those into it over their heads like Novogratz did not step in the prop it up it would be worthless.  

Jay Nov 13, 2017 11:07 PM Permalink

BCH, when launched, was held artificially high in value because most BTC holders couldn't access the coins to dump them. As more and more people gained the ability to dump BCH, it's price went down and down. This proved the BTC argument that people don't want to spend BTC. They want to buy and hold and use it as gold. They are willing to wait until the core development team implements improvements that allow it to scale "gracefully" (if that's possible). BCH's scaling solution makes mining much more concentrated, consolidated, and centralized. Now suddenly, whoops, people have changed their mind. Now they have an overwhelming need to buy coffee with BTC. I don't think so. This is not the flippening. It's the pumpening of a dying fork. Nice try though.

MagicMoney Nov 13, 2017 10:41 PM Permalink

As you can see supporters of Bitcoin have no convincing argument of investing into Bitcoin other than what is plainly obvious. It is bubble mania. If only they could use substantive reasons for their argument. At least the fund manager admits it is a bubble.