Hacker News Reader

Comment by Animats | Hacker News Reader

I really want to hear the story when someone dumps $100M worth of Etherium. Or Bitcoin.

I wonder what would happen if you went to an Bitcoin exchange and said "I want to sell $100M worth of Bitcoins over the next 30 days. I'll pay your usual fees. After each day's sales, you wire transfer the proceeds to my bank within one business day, and you agree to a sizable penalty if you're late. Any validation of identity you want to do takes place before we do any business."

View on HN

Coinbase/GDAX will do exactly this, and your ~$3m of trade volume per day will be <10% of their book, and a drop in the bucket compared to the global markets. Your trades will be arb'd to every other exchange in seconds.

There are a ton of complaints about Coinbase support, but they cater to the largest clients like every other financial company.

The question is how much of that volume is the same money going back and forth. Taking sizable amounts of money out of the system is different. See 2010 flash crash".[1] There may be less real liquidity than transaction volume indicates.

[1] https://en.wikipedia.org/wiki/2010_Flash_Crash

The majority of the global volume is crypto-crypto, so I agree it's a valid concern, but the volume of fiat trades has gone way up over the past several months. For example, Coinbase added 1 million accounts in June - the vast majority by necessity are putting fiat in vs cashing out.

One flash crash happened on the ETH-USD pair on GDAX like a month ago, when a large dump triggered cascading margin calls. Bitcoin has had a few of those over the years too.

The volume on many exchanges are fake. It's pumped up using bots buying and selling among each other. Large dumping tends to go through dark pools or OTC. The real volumes are much lower.

$100M in BTC is... ~29,000BTC. Let's call it 30,000BTC.

GDAX seems to handle 5k-10kBTC on a normal day. So liquidating in a month would be 10-20% of the trading volume on GDAX, every day for a month. Even pushing it out to 3 months liquidating, it would be a sizable portion of the sales. (This would be 0.250BTC/min for 90 days.)

I, too, would like to see what happened if someone liquidated a position that quickly.

(Of course, if you had $100M in BTC, you'd probably want to liquidate over the course of a year -- where you'd still be sizable traffic, but perhaps not completely crash the price. This would be 0.06BTC/min for a year.)

Edit:

Looking closer, GDAX seems to have a volume of about 6BTC/min. So the volume estimates for clearing 30kBTC in X days:

     30 days - 11.5%
     90 days -  3.8%
    365 days -  0.95%

GDAX is about 10% of the BTC volume globally, so you're talking 0.1%-1.2% of BTC volume being that clearing, for between a month and a year.

You'd also want to look for an OTC buyer at those levels. Gemini will facilitate those transactions and I think a couple others too. I don't have much experience in that area though.

The price crashes to 0.10 cents ... https://www.bloomberg.com/news/articles/2017-06-30/the-45-mi... ... and that was only 12.5 million. and then coinbase paid people who lost money out of their own capital. lol. ponzi at its finest.

well if you find people buying these coins, what's the problem? That's the concept of an exchange.

It'll definitely drive the price down ,so that would be a weird thing to do anyway, except if you _want to_ drive the price down.

Reply on news.ycombinator.com