Chris Hayes broke down a plan by Republican legislators to transfer billions of dollars of taxpayer money to owners of Bitcoin in exchange for their holdings.
Market cap isn’t liquidity. There’s only a few billion dollars of Bitcoin on offer at any given point so dumping another few billion into the market all at once would cause an enormous swing in price. The market may absorb it quickly enough for the price to recover, but it could also trigger panic selling which lowers the price further, which causes more panic selling… and voila there’s your run. It wouldn’t destroy Bitcoin, but the price could take a very long time to recover if it does at all.
Market cap isn’t liquidity. There’s only a few billion dollars of Bitcoin on offer at any given point so dumping another few billion into the market all at once would cause an enormous swing in price. The market may absorb it quickly enough for the price to recover, but it could also trigger panic selling which lowers the price further, which causes more panic selling… and voila there’s your run. It wouldn’t destroy Bitcoin, but the price could take a very long time to recover if it does at all.