Quote from: johnyj on December 16, 2013, 01:20:53 PM

Quote from: odolvlobo on December 16, 2013, 05:16:57 AM

Quote from: johnyj on December 16, 2013, 01:57:04 AM

Suppose that one guy have 31 million dollars, he bought all the 21 million coins at $1, and sold 10 coins to others. Then, he still have $10 million at hand. Then he refuse to sell any coins below a market price of $1 million and are willing to buy any coin at a price of $1 million. Then bitcoin's market price will be $1 million

He can set a bid and ask price, but he can't force anyone to trade at those prices. Suppose nobody will buy at $1 million. There will be no trades so you don't know what the market price is.

Also, if he was able to buy up all the coins for $1 each, then obviously nobody values them any higher than that. In this case, the owners of the 10 coins will happily sell them all to the rich guy for $1 million each. They have $10 million and the rich guy who started with $31 million is left with 21 million coins that he can't sell.

That is just an extreme example, the principle is that you hold large amount of coins but using certain amount of fiat money to support the exchange rate of small amount of coins on the market, thus make your holding more valuable. Banks are doing this kind of operation frequently, they hold large amount of fiat money but never release them, otherwise there will be very strong hyperinflation and destroy the value of fiat money

It doesn't make much sense unless you are going to use them on something else besides trading (which is simply impossible right now in any significant amount). Otherwise you inflict uninvited costs on yourself. Central banks are doing this because they have to defend their exports (as an example). They don't do it just for the sake of keeping exchange rate at certain level...