The digital currency investment firm “Dadiani Syndicate” was reportedly approached by a wealthy client to buy 25% of all Bitcoins currently in circulation as soon as possible.
Founded by art dealer Eleesa Dadiani, the Dadiani Syndicate is described as a “peer-to-peer network” where people can trade. Here people who want to sell are brought together with people who want to buy.
“One of our clients approached us and said they were interested in acquiring 25% of all bitcoin currently available,” Dadiani said. “There are a number of entities who want to dominate the market.”
A quarter of all bitcoin currently in circulation, including those bitcoin that may be permanently lost, is around 4.5 million and worth a staggering $38 billion at current exchange rates.
Dadiani said this kind of accumulation is not possible to “realize” but her company has been instructed, “to scour the markets and gain access to as close to 25% as possible.”
“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.
image by Shutterstock
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