Institutional Investors Are Using Back Door for Crypto Purchases
bloomberg.com
bloomberg.com
- investors chipping in not because of potential upside, but because of reduced volatility. [1]
- there is such a thing as collectible coins and that "Clean Bitcoins" make sense I guess :-) [2]
[1] > Over the last four to six months, the market has been trading in a very tight range, and that’s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space."
[2] > What’s more, miners can offer something unique: brand-new, “virgin” coins, which some investors covet. Such coins command a premium of up to 20 percent, according to Travis Kling, founder of the hedge fund Ikigai. It’s easier to prove they’ve not been involved in money-laundering operations, he said
What’s more, miners can offer something unique: brand-new,
“virgin” coins, which some investors covet. Such coins
command a premium of up to 20 percent, according to
Travis Kling, founder of the hedge fund Ikigai. It’s
easier to prove they’ve not been involved in money-
laundering operations, he said
See this bitcoin laundering method described in this post from a moderator on BitcoinTalk dated August 22, 2013, 02:32:31 AM [ https://bitcointalk.org/index.php?topic=279249.0 ] Payment to miners / mining pool operators for their freshly minted "clean" "virgin" coins in exchange for a 20% markup.. why would anyone want to immediately lose 20% of their investment?...
It's called insurance, just like after you buy a house you immediately insure it by paying a premium of x% of it's value.
In this case, you insure against someone in the future claiming those coins were stolen from him.
The investors want exposure to the bitcoin price, but not to some of the risks, so they factor them out as much as possible.
Investors, especially large institutions will have teams of lawyers who would would have paperwork from the party they purchase from vetting the purchase. Their insurance is the law and an ability to hold the seller responsible for loss in any case where that risk might exist.
No one pays 20% markup on a car, or gold, or a diamond ring under normal circumstances.
Washing illicit money though paying miners for their new Bitcoins is an established method for money laundering.
They are not buying Bitcoin to gain x% a year. That's what Dow Jones or AT&T stock are about. They are buying bitcoin hoping it goes to $100K a coin, and having a coin that has been used to buy/sell drugs or women...well you get it. Feds can take it or no one refuses to buy it.
"Decentralized dark pool exchange protocol. Built for laundering large volumes of crypto."
https://www.fincen.gov/news/news-releases/fincen-fines-btc-e...
They look pretty legit. Here's more info:
https://venturebeat.com/2018/09/27/worlds-first-decentralize...
It's worth noting that I've no connection to them nor any conflict of interest, just thought it was topical. Didn't have time to make a disclaimer in my original post.
Once population count goes stagnant or starts to decline then a lot of investment models will have problems.