Crypto trader and YouTuber, Tone Vays, explained that Amazon’s $140 billion CEO couldn’t buy every Bitcoin (BTC) in circulation.
What would happen if Bezos tried? “He would drive up the price of Bitcoin to the point where he could no longer afford it,” Vays told Cointelegraph in a message on April 23.
Why couldn’t Bezos buy all the BTC on the market?
On the day of Vays’ comments, all the speculative capital held within Bitcoin gave the asset a total market cap near $137 billion, with each coin priced at approximately $7,500, CoinMarketCap data showed.
In the last 11 years, roughly 18,343,537 BTC have circulated the market. A number of those coins, however, sit in various wallets and platforms with longer term holding in mind. Some early adopters even lost unknown amounts of likely unrecoverable BTC.
Essentially, only a certain amount of BTC is liquid, or immediately tradable, on exchanges and markets. “Bitcoin is a very illiquid asset,” Vays said. If Bezos tried to buy all available BTC, everyone would begin buying up Bitcoin after hearing the news, which would take the asset’s price even higher, Vays explained.
People might even panic?
Continuing his explanation, Vays said the situation might also cause fear in the market. “If he did achieve the purchase of a significant chunk of Bitcoin to rival Satoshi, or even say 25% of all Bitcoin, he could then cause some panic in the market with people thinking he might dump any moment, crashing the price,” Vays explained.
Vays referenced a similar situation seen roughly 40 years ago. Between 1979 and 1980, the Hunt brothers, W. Herbert and Nelson Bunker, attempted to purchase all silver on the market, also called “cornering the market,” an article from Business Insider detailed.
Similar to what Vays believes would happen with BTC, the Hunt brothers’ mass buying resulted in silver’s market value surging from $6 to $50 per ounce, Business Insider said.
“The government stepped in to shut it down,” Vays said of the Hunt’s silver buying caper. “I can also see the government stepping in if an American tried to corner the market,” Vays said of Bitcoin, noting the asset’s mainstream prevalence.
Philip Salter, Genesis Mining’s head of mining operations, also gave his opinion on the same hypothetical scenario on April 22.
Source: Cointelegraph.com
