bitcoin Institutional purchases will become a threat?

[Obliv0n 333]

It is not a secret that various private firms have bought Bitcoin in the last 6 months, MicroStrategy and square are an example, but none is enough for GreyScale, which today has reported that its investment portfolio exceeds 20 billion dollars in cryptocurrencies.

 

This is an alarming figure, considering that exactly a year ago the amount was 2000 million, this has brought to the debate the fact that GreyScale may be attacking the neutrality and decentralization of the network, since it will buy more btc than that is mined monthly.

 

Some defend this on the basis that it benefits price, but it is small investors and traders who will be affected.

 

What do you think about this new chapter in the history of Bitcoin?

[rekter 8129]

1 hour ago, Obliv0n said:

 

This is an alarming figure, considering that exactly a year ago the amount was 2000 million, this has brought to the debate the fact that GreyScale may be attacking the neutrality and decentralization of the network, since it will buy more btc than that is mined monthly.

 

Have no fear, Grayscale isn't mining bitcoin and only miners could technically affect the decentralization of btc network. Demand of BTC only affects to the price and when the price grows it attracs more miners, making bitcoin network even more secure.

 

They could technically use their btc to suppress the price but at this point it wouldn't make any sense and SEC would probably throw them in jail for artificial market manipulation.

[Jromz 2158]

I see no threat from institutional investments, at least regarding the centralization of Bitcoin. As far as we know, it does not matter how much Bitcoin they own, there is no chance for them to change the rules of the consensus overall to benefit themselves, as banks do with fiat currency. In my view, the only way they could affect the market somehow is by manipulating the price but this does not necessarily could mean a big threat, as there will always be a big interest from hodlers to buy Bitcoin, especially at low price levels.

[bogdanoff 3173]

Grayscale made Bitcoin available to institutions. These investors are not buying Bitcoin but a share of Grayscale Bitcoin Trust and the only limitation is a 6 month time required to hold before being able to sell in OTC market. 

Grayscale holds the Bitcoin in custody and this Bitcoin is not going to be moved ever. The Bitcoin in Grayscale custody is something like Paypal did, it doesn't move and not going to give access to anyone. It is a big problem for the ownership distribution of Bitcoin as it is not used in ways many were thinking, and it loses many of the features it has.

[Sykkuno 2887]

There is no threat to the Bitcoin network, this is the miners and the full nodes that are active and they are decentralized being run in thousands of different locations, what is described here it is some centralized authorities that control a big number of the Bitcoin supply and this is their own will what to do with them.

[zhoutong 2188]

It is a new chapter, there wasn't ever before so high interest into Bitcoin coming from institutions, this is remarkable achievement in my opinion and nothing to worry about. Bitcoin can be bought by anyone and if these companies want to use Bitcoin to create stocks and sell them in regulated markets this is even better for us, as this opens the gates of mainstream institutional and regulated adoption, without having to regulate Bitcoin directly.

[Mosab73 333]

In my opinion, whoever affects Bitcoin is the deceivers, so I think if private companies or institutions started storing the Bitcoin currency, this I do not consider it a threat because this means an increase in demand for Bitcoin and thus its price increases according to the law of supply and demand and this leads to an increase in the number of miners and I think that the decentralized network of Bitcoin will not  Affected, small investors are affected when they do not study market movement properly and technically

[yonkii 3205]

A threat to the dollar probably as this is the reason institutions are investing in Bitcoin, the obvious weaknesses of the dollar after an extended quantitative easing by the FED. Although I consider the USA the top economy the problem is that americans still think it is only them moving Bitcoin market and as usual make this big mistake to think they are controlling the market. In fact Bitcoin adoption this year was rising very fast in most places in the world and while the dollar is weakened adoption increased more outside the USA than in that country.

[Fixfin 2569]

It is not messing with anything, anybody can buy Bitcoin, I disagree with all custodial wallets and grayscale as well as paypal are just that, but also custodial wallets are Coinbase, Binance and all the centralized exchanges that are used by crypto owners to park their cryptocurrencies there, without caring for the advice we are always giving to hold the private keys.

[Obliv0n 333]

On 1/2/2021 at 12:05 PM, rekter said:

They could technically use their btc to suppress the price but at this point it wouldn't make any sense and SEC would probably throw them in jail for artificial market manipulation.

@rekter Well, with that I am calmer, the case of the SEC offers some security, although it can collapse markets as in the case of XRP.

 

I hope this has more positive than negative results for everyone from small investors to private firms that are getting involved in the market.

22 hours ago, yonkii said:

A threat to the dollar probably as this is the reason institutions are investing in Bitcoin, the obvious weaknesses of the dollar after an extended quantitative easing by the FED. Although I consider the USA the top economy the problem is that americans still think it is only them moving Bitcoin market and as usual make this big mistake to think they are controlling the market. In fact Bitcoin adoption this year was rising very fast in most places in the world and while the dollar is weakened adoption increased more outside the USA than in that country.

@yonkii It is interesting that you mention the situation of the dollar due to the actions of the FED. I just created a topic that involves world debt and the possibility of bitcoin as a refuge of the collapse of the dollar, you can visit it if you like, greetings!

[cryptovlek 2597]

The price was looking it will go higher a lot since months ago as during the summer it was the last of the bears that were exterminated and Bitcoin found its way. Meanwhile we have seen institutions buying Bitcoin massively. The threat you see has to do with more Bitcoin being in custody wallets and services and not used in other ways or held in proper wallets with the private keys by the legal owners. However these owners chosen to have someone else hold the Bitcoin for them. They were not planning to use them for the freedom Bitcoin gives to them. They just invested. I don't see any threat to Bitcoin in that.

[Bruno52 1141]

I think that greyscale succeeds to buy all the bitcoin and makes it centralized, we the traders will be at a loss because they might cause many people to become skeptical and leave bitcoin which will lower the price.

[Obliv0n 333]

36 minutes ago, cryptovlek said:

The price was looking it will go higher a lot since months ago as during the summer it was the last of the bears that were exterminated and Bitcoin found its way. Meanwhile we have seen institutions buying Bitcoin massively. The threat you see has to do with more Bitcoin being in custody wallets and services and not used in other ways or held in proper wallets with the private keys by the legal owners. However these owners chosen to have someone else hold the Bitcoin for them. They were not planning to use them for the freedom Bitcoin gives to them. They just invested. I don't see any threat to Bitcoin in that.

@cryptovlek I have no problem with the fact that bitcoins are "frozen" in protected wallets, my question is based, so to speak, on what could happen when these institutions decide to liquidate their assets, it is clear that it currently benefits the market but after that, what do we have left? 

greetings😅

[cryptovlek 2597]

32 minutes ago, Obliv0n said:

@cryptovlek I have no problem with the fact that bitcoins are "frozen" in protected wallets, my question is based, so to speak, on what could happen when these institutions decide to liquidate their assets, it is clear that it currently benefits the market but after that, what do we have left? 

greetings😅

Oh thanks for the explanation friend. About that, there is grayscale where most institutions are buying Bitcoin, but I haven't heard of Grayscale ever selling any. The Bitcoin trust exists for many years since 2013 I think that Grayscale never sold any Bitcoin back to someone. Perhaps some only to cover expenses and take profit but not those that belong to their clients. It gives to the institution a share of their trust alled GBTC. This is what the institutions can sell later at a regulated OTC exchange. But Grayscale won't be buying this share, there is this market where deep pocket investors are trading.

So, it goes like this.

->Grayscale is buying as institutions ask for Bitcoin.

->It holds the Bitcoin forever in its custody and gives a share of the Grayscale Bitcoin Trust (GBTC) to the institution.

->Institutions can trade at OTC (over the counter) exchange. 

This is a legal representation of a Bitcoin. So these institutions can only sell these lets call them stocks. If there is panic selling and they sell all of them, grayscale will still be in custody of all the real Bitcoin that would have just passed hands. In reality the Bitcoins at Grayscale will be frozen forever but virtually they will keep being trading hands in the form of GBTC.

[susan8929 811]

I think that as an investor it's too good for those kinds of institutions to buy Bitcoin so that the demand increases and, in that way, the price increases as well. Besides, everything seems to indicate that in 2021 there will be more institutional purchases at btc.
Now, as a Bitcoin enthusiast, I think that those kinds of institutional purchases are negative for btc, because large investors have the possibility of manipulating the market and it's not positive that one single company owns a large percentage of the btc currencies. Anyway, we'll see what happens during 2021 with the price of Bitcoin.
 

[Obliv0n 333]

22 hours ago, cryptovlek said:

->Grayscale is buying as institutions ask for Bitcoin.

->It holds the Bitcoin forever in its custody and gives a share of the Grayscale Bitcoin Trust (GBTC) to the institution.

->Institutions can trade at OTC (over the counter) exchange. 

This is a legal representation of a Bitcoin. So these institutions can only sell these lets call them stocks. If there is panic selling and they sell all of them, grayscale will still be in custody of all the real Bitcoin that would have just passed hands. In reality the Bitcoins at Grayscale will be frozen forever but virtually they will keep being trading hands in the form of GBTC.

I was unaware of the technicalities behind institutional acquisitions, they are definitely investments orchestrated in a way that does not affect the market, let's hope this fever continues, bitcoin in this bull run is unstoppable!

[percare 3192]

The threat in my opinion is only some big bad news that could happen. Bitcoin real volatility is the news of restrictions and regulations. If the US decided to restrict, or increase taxation, or even make KYC mandatory it could be very bad news.

[Syedbesharat 5423]

If the crypto market biggest shares goes in institutes hand then they will manipulate the price. And the small time traders will not gonna make profit because the market follow be in their hands like whales. But this time the whales will be white colour and the financial freedom claims will remain only claims for crypto adopter the centralised system will become strong against decentralised system and people will face same days like fiat economic system in crypto. This is alarming state for crypto community. 

[kryptonick 2659]

On 1/5/2021 at 4:25 PM, Obliv0n said:

what could happen when these institutions decide to liquidate their assets,

As I understand Grayscale, it will be impossible for this company to sell the assets back to the crypto market. The reason is it buys Bitcoin and gives something else, a share, to the customers. Then the customers trade these shares, but have no right to the Bitcoins. Grayscale also has no right to move the Bitcoins. It is very difficult for me to understand if this should have been allowed in the first place. It seems there is some kind of gap in the process.

There are these Bitcoins that Grayscale owns, they are worth +20billion. And then there are 20 billion USD in the GBTC assets too. This alone, makes it doubling the assets in existence. I am not so sure how this is allowed by any kind of economic model.

Also  the fact that nobody can sell the Bitcoin but only able to trade the shares makes it even more problematic. Especially for the reason that Bitcoin losses all the features it has this way. It is just for investment and not even able to be moved.

[pablomarwan 3082]

I am my life in this topic. I cannot prove that there will really be a relationship between cryptocurrencies and financial institutions. also, I cannot say that they seek to disperse everyone and sabotage the network.
Some things if we were not among them we would not know.

[abohasnn9 2401]

My dear, I see the issue very normal for several institutions to invest in Bitcoin or any other currency, as it is not legally prohibited and everyone has a fan and the spread of tangible wallets. The currency store is an interesting thing, as it has more encryption and it is safe because it is mainly beside you. Thank you very much