[ZS] Bitcoin Price Manipulation

[R|diger Koch]

A while ago, Bitcoin was almost a synonym for volatility. The price could
easily change 30% and more in a single day. That ended a few months ago.
Since then, the price to the $ is as stable or even more stable than the
Euro. What happened?

http://mtgoxlive.com/orders
is a graphical representation of MtGox's order book and the price. You can
see that there is a bid wall at $5.20 and an ask wall at $5.30. I believe
that is the same trader. He is limiting the range within which the price
can fluctuate - *in other words, the price is manipulated*. The past weeks
of history seem to indicate that the guy is slowly increasing his stash of
Bitcoins - if the bid wall is weakened, it is enforced. You cannot break
through. If the ask wall is attacked, the guy seems less dedicated to
holding it.

To cut the story short: I believe there may be someone slowly buying up
large amounts of Bitcoins. And I believe that he is not interested in
volatility. If true, this is good news and bad news. Good news because we
can expect the price going up considerably at some point, probably
triggered by large announcements or a hype campaign (Everybody did get a
good position already, no?). Bad news, because it's possible that a single
person is trying to own a large amount of future cash reserves - cash
reserves that cannot be increased by definition. You have to consider that
$10 Million is sufficient to buy up 10% of all Bitcoins that will ever
exist - if you are able to keep the market oblivious of it. I believe that
is a strong incentive for any Billionaire who understands the dynamics of
Bitcoin.

Cheers
R|diger

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