The price of bitcoin is a prediction market on Nakamoto's reveal
Posted: Sun Apr 10, 2016 4:32 pm
Earlier today, the price of bitcoin shot up and seems to be trending slightly upwards since. While still trading within the same range as the past few weeks, this price bump is worth paying attention to because of the rumors floating around that Satoshi Nakamoto will reveal himself sometime before April 14.
Unlike stocks, insider trading of bitcoins is not illegal. Even if it were, anyone can create fake verification documents and submit them to an exchange and fund his or her account with cryptocurrencies, never withdrawing real dollars at all.
Consider what would happen if I were one of the few journalists who has this information that Nakamoto is going to reveal himself soon. While the contract with my employer might prohibit me from purchasing bitcoins, violating that contract would at most get me fired, not arrested. There are very few pieces of news that would cause bitcoin price to rise more quickly than Nakamoto reasserting himself at a time when leadership is most needed (i.e. before the halving crisis develops). When the articles suggesting that Craig Wright was Nakamoto were originally published, the price of bitcoin skyrocketed overnight, on what compared to the rumors is much less convincing evidence.
Even if there is a crash once the euphoria wears off and the Core refuses to grant Nakamoto control over the project again, the knowledge of the impending reveal would be nearly guaranteed money. Any rational person would take the risk of sacrificing his job on such a sure bet, because it would be possible to live for years (or even indefinitely) on the profits while finding a new one - and that assumes that the employer would both discover that bitcoins had been purchased and follow through on the firing.
Since one of the tenets of public relations is to release news on Mondays for maximum exposure, tomorrow is the most likely time we would see this bombshell if it happens. With the halving event far enough off and no other news in the headlines, the price of bitcoin right now is largely a prediction market on the likliehood of Satoshi Nakamoto asserting himself this week. If price continues to hold steady, then nothing is likely to happen. If, after all this time of low volatility, the price of bitcoin starts to rise sharply for what seems to be no reason at all, then more insiders are learning of the news, and we can probably expect to hear an announcement within hours.
Unlike stocks, insider trading of bitcoins is not illegal. Even if it were, anyone can create fake verification documents and submit them to an exchange and fund his or her account with cryptocurrencies, never withdrawing real dollars at all.
Consider what would happen if I were one of the few journalists who has this information that Nakamoto is going to reveal himself soon. While the contract with my employer might prohibit me from purchasing bitcoins, violating that contract would at most get me fired, not arrested. There are very few pieces of news that would cause bitcoin price to rise more quickly than Nakamoto reasserting himself at a time when leadership is most needed (i.e. before the halving crisis develops). When the articles suggesting that Craig Wright was Nakamoto were originally published, the price of bitcoin skyrocketed overnight, on what compared to the rumors is much less convincing evidence.
Even if there is a crash once the euphoria wears off and the Core refuses to grant Nakamoto control over the project again, the knowledge of the impending reveal would be nearly guaranteed money. Any rational person would take the risk of sacrificing his job on such a sure bet, because it would be possible to live for years (or even indefinitely) on the profits while finding a new one - and that assumes that the employer would both discover that bitcoins had been purchased and follow through on the firing.
Since one of the tenets of public relations is to release news on Mondays for maximum exposure, tomorrow is the most likely time we would see this bombshell if it happens. With the halving event far enough off and no other news in the headlines, the price of bitcoin right now is largely a prediction market on the likliehood of Satoshi Nakamoto asserting himself this week. If price continues to hold steady, then nothing is likely to happen. If, after all this time of low volatility, the price of bitcoin starts to rise sharply for what seems to be no reason at all, then more insiders are learning of the news, and we can probably expect to hear an announcement within hours.