Can the Rich Corner the Bitcoin Market? – Trustnodes

Can the Rich Corner the Bitcoin Market?


“We haven’t had a universal currency since gold and silver. A decentralised economy allows for borderless trade, which hasn’t been possible before with such ease; people are used to decision-making in trickles, with the group up top choosing what everyone can and cannot do … cryptocurrency requires a cognitive shift.

People need to understand why cryptocurrency should be adopted wider, integrated into our existing way of life, for gradual change.”

So says Eleesa Dadiani, who is believed to have made an astonishing claim. Stating:

“One of our clients approached us and said they were interested in acquiring 25% of all bitcoin currently available. There are a number of entities who want to dominate the market.”

Is it true? Well who knows. Is it credible? Well, credible enough for us to publish it with disclaimers of unconfirmed and all the rest. Is it possible?

The Rich, One of Us?

Ever since a number of studies effectively proved that bitcoin and cryptos in general are an uncorrelated asset, and thus very useful for diversification and as a hedge, the beginning of the entrance of institutional investors has been a theme running in parallel to monetary mismanagement.

From the hyperinflation in Venezuela, to the constitutional crisis in Britain, the fall in Yuan’s value and the plunge in Argentinian Peso, central bankers have time and again proved the fundamental premise of this space: that however much they try and however much they like, that even if they are angels incarnate, they will mismanage our money.

Sanctions on Russia, a financial blockade on Iran, the entrance of rich Arabia and perhaps even the welcoming of Africa have been a developing theme since last year.

Then since the tipping point was crossed in 2017, with bitcoin debuting in awareness at the end of that year, and then with studies last year amounting to sufficient evidence where one can say – as much as humans can say anything – it is thus, the beginning of the movement from the early adopters phase to institutional investors was confirmed by the announcement of a number of institutions.

Adoption cycle memed.
Adoption cycle memed.

This is a meme chart, and someone has indeed memed it. The smart money part should be replaced with early adopters. That red line cycle has gone through about three times now or maybe four while still being in the early adopters stage.

You should remember of course that a US Congressman still thinks it fit to get the microphone and outright say bitcoin should be banned. To say nothing of Warren Buffet and all the rest. Or the fact Amazon doesn’t accept bitcoin yet. Not even eBay.

So arguably we are now just entering the institutional investors stage. Here we have rich people and also somewhat smart people and also, you know, milkers.

For an institution to sell bitcoin to “retail” as they call it, to cattle as they mean it, they first have to buy it right?

The more you have of course the more you can control it, it’s price and so on, and thus the more you can milk.

That someone, whether a person or an institution or even a government, want’s 25%, thus, is to be expected not surprising. But can they have it?

House of Dadiani

“Accepting Russian sovereignty in 1802, the Dadiani were elevated to the dignity of Prince of the Russian Empire and enjoyed significant independence in their home affairs.

Russia made a de facto annexation of Samegrelo in 1857, but Samegrelo remained nominally in existence until January 4, 1867, when Niko Dadiani, the last Prince of Samegrelo, was deposed and the principality was abolished. Prince Niko Dadiani officially renounced his rights to the throne in 1868.”

As a kid, the 1800s sound like a trillion years ago, but of course when our grandfather was born, the 1800s were what we’d now consider the 90s.

Much has changed since then and in many ways little has. Wealth has moved in a caroselo, but largely the rich have continued being rich, through war and peace, devastation and prosperity.

Eleesa Dadiani herself tries to downplay this heritage. “I lived in Oldham, for heaven’s sake!” she says. Oldham being an industrial powerhouse in 1800s UK Manchester that now looks kind of stuck still in that century.

“‘Unschooled, with no degree, I’ve always been on the prowl, on the lookout for new opportunities,’ says Dadiani. Hence her early adoption of Bitcoin, as well as more obscure cryptos like Dogecoin.”

On the other hand “her talk is peppered with references to former Libyan leader Muammar Gaddafi and the petro-dollar, capital flight in China, and Russian trade relations.”

As the talk above with the BBC clearly shows, this appears to be a woman in the business of serving the very rich who may have some need or desire for this new digital money.

Nakamoto on Cornering the Bitcoin Market

“BTC Vulnerability? (Massive Attack against BTC system. Is it really?).” So says a noob all the way back in 2010 when anyone and everyone was trying to find any little whole in the bitcoin designed with the presumed premise of “this doesn’t work.” And here is Satoshi Nakamoto, bitcoin’s inventor:

“What the OP described is called ‘cornering the market’.  When someone tries to buy all the world’s supply of a scarce asset, the more they buy the higher the price goes.  At some point, it gets too expensive for them to buy any more.  It’s great for the people who owned it beforehand because they get to sell it to the corner at crazy high prices.  As the price keeps going up and up, some people keep holding out for yet higher prices and refuse to sell.

The Hunt brothers famously bankrupted themselves trying to corner the silver market in 1979:

“Brothers Nelson Bunker Hunt and Herbert Hunt attempted to corner the world silver markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world’s deliverable silver.[1] During Hunt’s accumulation of the precious metal silver prices rose from $11 an ounce in September 1979 to nearly $50 an ounce in January 1980.[2] Silver prices ultimately collapsed to below $11 an ounce two months later,[2] much of the fall on a single day now known as Silver Thursday, due to changes made to exchange rules regarding the purchase of commodities on margin.[3]”

25% of bitcoin’s total supply is more than half of all bitcoins that have moved in a year, with circa 10.5 million bitcoin not moving at all since May 2018.

Moreover only about one million moves onchain in any given day, with 25% being 4 times that.

Circa 5 million bitcoin are also estimates to have been lost in the early days or in dust amounts or by lost private keys and so on.

Meaning bitcoin is a lot more scarce than 21 million, with even less in exchanges where the price is set.

Thus a $1 billion injection in fiat can make a far bigger difference in price or market cap than just adding $1 billion to it.

Suggesting a rich person or institution wouldn’t quite want to attempt to corner the market, with this 25% probably being more of a way of saying: as much as you can.

And since perhaps there isn’t much sell supply Over the Counter (OTC), they may well have thought they could go to the media and basically ask for sellers.

Alternatively you can say maybe they bigging up the price to sell higher after accumulating, but of course anyone smart enough to access the media bigly would also be smart enough to know that’s exactly what you’d think.

Thus, they’d achieve both their aims at the same time. Let people know they need sellers, while fooling people into thinking they want to sell when they actually want to buy.

3D chess, that’s the big league. There’s 4D and 5D later on, but for now we can enjoy the two levels below.

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Comments (1)

  1. If I want to buy as much as possible, I would tell my proxy to keep this as private and confidential as possible. And if my proxy is stupid enough to go public with my intent, I will have him/her terminated asap. Otherwise, there is counterintelligence involved.

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