Story by: Billy Bambrough
“A buyer of this size is going to push the price up to make this kind of accumulation even more expensive,” said Mati Greenspan, brokerage eToro’s senior market analyst. “There are ways to offset that kind of demand-based price increase but after a certain level there’s not much you can do to prevent it.”
According to Greenspan’s estimates, of the 21 million bitcoin that will ever exist, “many will not be mined for a long time and many more are lost for good.”
“Yet even a greater number of coins are currently being held by hodlers [a name for long-term bitcoin holders] who will not be willing to part with them for any price,” Greenspan wrote in a note to clients. “Realistically speaking, there are probably less than 5 million coins actually circulating at the moment.”
One of the biggest challenges for Dadiani is how to buy large amounts of bitcoin without affecting the market.
“People buying large quantities of bitcoin want to avoid slippage,” said Dadiani. “The only way to do this is to avoid exchanges.”
Slippage is the difference between the expected price of a trade and the price at which the trade is executed and can be made worse by periods of higher volatility, something the bitcoin market is especially prone to, and when a large order is made in a low volume market.
Dadiani claims to have built up a consortium of sellers from around the world who have “colossal” amounts of bitcoin or who want to buy significant amounts and she is confident they have all been properly vetted against money laundering regulations.
“We don’t deal with people who are not clients of reputable banks,” said Dadiani. “We are market makers, coordinators of these trades. Once you involve banks and institutions, it’s up to them to make sure their clients are abiding by regulations.”
The Dadiani Syndicate is currently in the midst of its fourth trade, all of which have been “very large volume” and each taking weeks or months to complete. The Dadiani Syndicate receives a percentage of each trade; a brokers’ fee.
The trades so far have all been well into the millions of dollars, made up of thousands of trades per day.
Since the beginning of this year, the bitcoin price has ballooned over 120%—adding billions of dollars to the value of these trades.
“The interest in bitcoin has never waned,” said Dadiani, adding her art gallery has dabbled in cryptocurrency for years. “Though the media paints a very different picture.”
“At the moment, people just want to buy bitcoin. There’s little interest in other cryptocurrencies but we have not been doing this long and would be open to others in the future if clients wanted it. If someone wants large amounts of ether or another major cryptocurrency, we would likely be able to find a seller.”
“Art and cars are a small industry, bitcoin and crypto is something different,” Dadiani added.