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Comment by cm2012 | Hacker News Reader

cm2012

I wonder if this person is enormously rich now from BTC, considering how early he got in. Not that it's any of our business...

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Rich in bitcoins - yes. Rich in USD? Not yet.

He had a balance of ~1200 btc on mtgox in March of 2013, during a time when bitcoin was hovering around $50. Had he sold it all then it would have been a cool $60k. Had he kept it until now, it would be approximately $1MM (it's never been below $50 since that time).

Whether that counts as "rich" is a matter of perspective, I guess.

Is that all he had, though?

Doesn't matter for a lower bound, of course...

It only counts as "rich" if he can use the money. I suspect that in practice, such large amounts of Bitcoin money have limited usefulness. It would be hard to get the actual million dollars his wallet is supposedly worth. There are still exceedingly few businesses that accept Bitcoin payments. At best, he could get augment whatever other income he has by selling small amounts of his Bitcoin money at a time.

According to [1] and [2] I can sell 100 bitcoins for $88,631 or $96,805 at Bitstamp and Mtgox respectively - or 10,000 bitcoins for $7,155,446 and $8,797,257

As I understand it those are offers to buy that are on the market right now, so you could execute the trades instantly.

[1] http://bitcoincharts.com/markets/bitstampUSD_depth.html [2] http://bitcoincharts.com/markets/mtgoxUSD_depth.html

Yes, that's correct. The market isn't nearly as illiquid as some of the commentors on this forum would like you to think.

According to my calculator, selling 1000 BTC on Bitstamp would yield $867,833 with a slippage/liquidity cost of $28,958, or around 3% of 'face value.'

I made a little Python script that calculates the slippage from selling/buying an amount of BTC on various exchanges. Here's the result for selling 1000 BTC right now (in both USD and EUR):

    rune@rune-desktop:~/Programming/scripts/bitcoin$ ./depth.py 1000
    1000.00 bitcoins can be sold for 956,782.15 USD on Mt. Gox with a slippage of 28,317.85 USD (2.87%)
    1000.00 bitcoins can be sold for 922,365.80 USD on Bitstamp with a slippage of 18,434.20 USD (1.96%)
    1000.00 bitcoins can be sold for 864,201.16 USD on Bitfinex with a slippage of 76,548.84 USD (8.14%)
    44.38 bitcoins (insufficient bid volume) can be sold for 22,951.93 USD on Kraken with a slippage of 964,703.67 USD (97.68%)
    rune@rune-desktop:~/Programming/scripts/bitcoin$ ./depth.py -c EUR 1000
    1000.00 bitcoins can be sold for 697,614.73 EUR on Mt. Gox with a slippage of 17,392.27 EUR (2.43%)
    No orderbook for BTCEUR on Bitstamp
    No orderbook for BTCEUR on Bitfinex
    81.19 bitcoins (insufficient bid volume) can be sold for 52,229.71 EUR on Kraken with a slippage of 679,770.29 EUR (92.86%)

Yes, but in doing so you increase supply and therefore decrease the price. When you have a large amount of bitcoins, selling them all means flooding the market and ultimately selling them at a very low price. The best you can do is sell a portion every day.

We are only talking about 1000 in this case. There is enough book depth to sell 1000.

Mtgox had millions is USD daily volume at that time.

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