What would happen to Bitcoin if the Mt. Gox trustee sold $4 million a day of Bitcoins for 100 days?
The problem with the Bitcoin world is that the "exchanges" are so cash-weak. They're not just exchanges; they're exchanges, brokers, and depository companies all in one. In real finance, those functions are separated. The NYSE has no stake in any transaction.
I can't believe I didn't see this sooner. I wonder if Coinbase will have to divest GDAX once regulation catches up.
Not really. Glass-Steagall separated investment banks from commercial banks. There is approximately no one fulfilling the role of commercial bank in bitcoin - no one taking bitcoin deposits and using them to underwrite bitcoin mortgages.
Generally exchanges, trading firms and brokers do not have to be separate in the US financial system. For example CME, the largest futures exchange, owns a small trading firm called GFX. IEX operates as both an exchange and a broker.
If you'd dump all that even across all major exchanges that support JPY, guess what, you will easily empty their order books followed by every other exchanges exploding into mass confusion with crazy arbitrage literally killing the market.
Has to be some off the book trade or auction when FBI sold a large sum.