[mrb]

«I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet.»

Wrong. 1.5+ BILLION dollars' worth of bitcoins are sold and bought in aggregate daily on 100+ exchanges: https://coinmarketcap.com/currencies/bitcoin/#markets

[cshenton]

Being able to sell one cryptocurrency for another doesn't mean the first cryptocurrency is liquid.

[DennisP]

From a quick check at coinmarketcap, the daily bitcoin/dollar volume on BitMEX alone is $455 million. Next up is Bitfinex with $182 million.

[gnaritas]

That's a very very small amount, real currency markets do trillions a day, bitcoin is the size of a large company. He's totally right, that's a small liquid market when compared to the real markets. If you tried to dump 10 million in bitcoin all at once, there's a good chance you're going to crash the market; 10 million wouldn't even move the price in the EURUSD.

[mrb]

«That's a very very small amount, real currency markets do trillions a day»

It is. But that's not what partiallypro and I were discussing. We argued about whether selling "millions" would crash BTC or not.

«He's totally right»

Did you even read the link I posted? Even if you look at only the BTC/USD pair, $10M represents merely ~1% of the volume sold DAILY on the top 6 exchanges (~$800M). You would probably need to sell an order of magnitude more, so $100M, in a single day, to start affecting the markets significantly.

[gnaritas]

I think you're confusing daily volume with volume available at any one time. Read what I said, dump 10 mil at once. Just because you can trade 10 million in a day doesn't mean the market can handle a 10 million dollar order in one shot without massive slippage due to lack of liquidity. You could drop a 50 million dollar order on the EURUSD and you might maybe move the market 1 point, but a mere 10 million would instantly cause a large swing of perhaps 10% in the bitcoin market, that's why it's so volatile, it's a small market.

It's so small you have individual holders the community now calls whales who can individually manipulate the price with buy and sell walls; no individual can do anything remotely like that in the FX market. One because they don't have enough money, and two because such market manipulation is illegal.

You'd need to spread your purchase or sale out over the day to avoid massive slippage for an order that big because there just isn't enough liquidity to absorb it without the moving the price. 10 mill is about 2500 coins, go look at the order book on any exchange, a purchase that large is going to massively move the price, looks to be possibly 300-400 dollars you'd move the market with that one order. 50 million would certainly crash/bubble the market.

[mrb]

I make a living trading BTC. I know the difference.

The OP mentioned selling in a day, not at once: «I doubt you could liquidate millions of dollars of bitcoin IN A DAY...» This is what I commented on.

You changed the topic and started talking about selling all at once, which would of course eat a bunch of bids. However even doing this wouldn't "crash the market." The order books are deeper than you think. It's hard to find examples, because it's plain dumb to market-sell this much in one order. But I found a ~1150 BTC sell on Bitstamp around 3pm on September 13 and it barely moved the price: https://bitcoincharts.com/charts/bitstampUSD#rg5zig1-minzczs...

It would eat even lower bids on exchanges with less volume/thinner books, but still wouldn't crash the market. For example some idiot sold 1200 BTC in two market-sells of 600 BTC each, 30min apart yesterday on Gemini; and although it ate all the bids from $4100 to $3400, twice!, it didn't "crash the market". Other exchanges didn't react. Subsequent trades resumed exactly where the price was before ($4100).

[gnaritas]

OK, little more liquid than I expected, I just glanced at the order books on bitcoinwisdom. What happened on Gemini looks more what I'd expect, a deep and fast crash as all the liquidity was eaten.

[DennisP]

Large cap stocks are not generally considered to be illiquid investments, even though they're much smaller than major currency markets.

[gnaritas]

Because there are thousands of stocks in the market, whereas BTC is about half the entire crypto market; huge difference.

[DennisP]

If you dump ten million bucks worth of shares in a $10B company, it doesn't matter how many other $10B companies there are. All that matters is the liquidity of that particular company.

[partiallypro]

That's irrelevant, those aren't single transactions. If you can trade $15 Million in a single transaction in bitcoin without effecting the price, I'll say it's becoming liquid.