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by gnaritas
3185 days ago
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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. |
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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).