The supply of Bitcoin is finite at about 21 million. Most of that is still out of circulation, either sitting in wallets or waiting to be mined. But what would happen if the owner of the fattest Bitcoin stash sold his coins?
It turns out that the answer is both simple and complicated, depending on how you look at it. But before we get to that, let’s look at the biggest stakeholder in the Bitcoin ecosystem, Satoshi Nakamoto
Who is Satoshi Nakamoto?
No one knows if Satoshi is his real name or an alias or whether it’s actually a group of people operating under the name. All we know is that the name authored the Bitcoin white paper and executed the first reference implementation.
Satoshi has never revealed personal details about himself. However, several cryptography experts are suspected to be behind the giant cryptocurrency. Some of them include Hal Finney, Nick Szabo, and Craig Wright. You can check out this video to learn more : Youtube
He is rumoured to own over 1.1 million Bitcoin, which is well over $30 billion according to today’s prices. He accumulated the stash by mining at a time when each block yielded 50 BTC. Every time there’s a significant market trend, people speculate that he’s moved some of his precious loot. For example, speculations suggested that he moved about 50BTC from a 2009-era block back in May of 2020.
So what if he actually did it?
Selling all that BTC would have catastrophic effects on the ecosystem. We will most likely see at least one of these scenarios.
Nothing would happen
If Satoshi decides to sell all his coins, the odds are very high that nothing would happen. As a highly intelligent guy, he would probably sell the coins in small waves. This way, he could slowly cash out without causing price fluctuations. He would also need to sign up to various exchanges to keep the effects diffuse.
The price would never fluctuate in the long run, and people in the BTC ecosystem could rest easy, knowing that a mass dump is no longer an option.
The coins would lose value
On the other hand, he could tank the prices as soon as he clicks sell on an exchange. Economics teaches us that as supply rises, demand falls. After about 10,000 BTC, he’d run out of buyers because prices would be abysmal.
At this stage, it wouldn’t make any sense to continue dumping the coins simply because they’d have no monetary value to him. But if he pressed on, Bitcoin may reach an all-time low and never rise again.
Other variants may slowly rise to take its place
Eventually, the ecosystem built around Bitcoin would have to migrate somewhere else. Day and swing traders will need a new market, exchanges will need a new currency to pair, and black market dealers will need a new payment form.
New coins would probably try to fill Bitcoin’s shoes, but as we’ve learned, only a few ever rise to prominence. It may be one of the existing altcoins or an entirely new one. One thing is for sure, Bitcoin’s position will never remain vacant.
Satoshi Would Never Sell all His Coins
If you were Satoshi and you had over a million BTC, would you sell? If you’re like most people, your answer is an emphatic NO! The odds are that, like you, Satoshi would never dump his Bitcoin. Here are four reasons why.
It doesn’t fit his vision for the coin
It’s clear that someone as smart as Satoshi would never sell all his coins in that way. His vision for the currency is a global currency that any government doesn’t control. Selling his coins may trigger a series of events that makes that virtually impossible to accomplish.
His BTCs are too valuable
Satoshi selling all his coins would be synonymous with someone who sold all his Apple shares just as the company began its rise. It would be absolutely ridiculous. Bitcoin is currently the hottest cryptocurrency, with enough clout to sway all the other coins; whenever the price of Bitcoin rises, all currencies rise with it, and vice versa.
These fluctuations have enabled traders to cash out by opening long and short positions. Bitcoin has thus become a source of limitless wealth, with several opportunities to make bank. The larger it grows, the more Satoshi’s coins are worth, and the richer he’ll be. Why would he ever sell?
He loves anonymity
Satoshi is also famous for not being famous. As we’ve already established, all we know is that he created the network. We don’t know his real name, his nationality, or anything else. Selling all these BTC at once would definitely raise some eyebrows, and it’s only a matter of time before someone figures out it’s him. That would be out of character for someone who’s stepped away from BTC since 2010.
Besides savvy cryptocurrency users, the government may also pick an interest. Remember that his BTC is estimated to be worth up to $30 billion. Since the sale is for straight-up cash, he’d suddenly have billions from “unfamiliar sources” sitting in his account. All that money flooding in at once would definitely raise some red flags.
The coins are his title deed
One more reason why Satoshi would never sell his coins is the pride of ownership. Currently, no-one knows who he is and what he is up to. The BTC in his wallet is his only form of identification. If Satoshi sold, he’d lose his claim to his creation; the same creation he’s gone through so much trouble to launch.
Here’s how Satoshi Would Cash Out
Given how many BTC are traded daily, the odds are that Satoshi has already sold several of his BTC. Here are three ways he could cash out on his coins.
Sell them slowly
All he has to do is find willing buyers and slowly sell the coins over some time. Depending on the ecosystem, that could be weeks or even months. But it’s by far the best way to get the cash value of his coins
Trade them in for another cryptocurrency
From what we know about Satoshi, his goal is to create a global form of payment. If a new cryptocurrency suddenly took that mantle, he may want to get on board. Although this is highly unlikely, considering how established BTC is today.
Spend them as is
Several organizations have started accepting BTC as a form of payment. Most recently, Elon Musk announced that you can now buy the futuristic Tesla car using BTC. We may see other brands following in the same footsteps. If this happens, Satoshi will be that much closer to his dream and may choose to spend his coins as they are. If they are accepted forms of payment, he has no reason to default to fiat.
That’s how Whales Move
The Bitcoin trading market is thin, unregulated, and subject to a lot of volatility. Volatility can be caused by negative news, the market’s fear, security breaches, and of course, owners of large amounts of the currency.
Just as Satoshi could tank the price overnight, some groups of individuals also have enough BTC to sway the price in either direction. They could buy up a significant amount to drive up the price and suddenly cash out, causing it to lose value rapidly.
Whales have a greater influence over the Bitcoin trading market than other markets like stocks and bonds. This is primarily due to regulation and the number of organizations involved. Large-scale price crashes can only occur when the whole population drives up the price and suddenly loses interest, a little like what we say in the stock market crash of 1929.
According to CoinDesk, whales have been behind some of Bitcoin’s strongest rallies against the dollar. For example, in November 2020, whales and large institutions bought the dip and drove the price up. They then sold their coins for a huge profit, sending the price back down.
Will BTC ever fulfill Satoshi’s dream?
If anyone had a definitive answer to this question, they’d probably buy all the BTC they could or sell what they already have.
Bitcoin has won some major battles against regulatory bodies and governments. It’s even become an acceptable form of payment in many parts of the world, with the power to buy everything from food and cars to apartment units.
The cryptocurrency still has a long way to go before it fulfills its creator’s dream of being a global payment means. One thing we do know is that cryptocurrency is here to stay.
The bottom line
Satoshi Nakamoto is possibly one of the most enigmatic personalities of our era. He (or she or they) created the ecosystem we have today. If he were to sell his 1 million BTC, the chances are that the approach would be methodological, spread over several months, and exchanges. Otherwise, the coin would crash and may never rise again.
However, it’s unlikely that Satoshi would sell his stash, considering Bitcoin’s growth in recent years. More likely, he’d sit back and watch his wealth grow.