If the government really wanted to fuck Bitcoin they would only need to folk out a few million and buy out most of the Bitcoin in existence right now and Bitcoin would become worthless. they see it has a threat so this is going to happen if we like it or not. They have a plan and this is probably it. theres only 13 million in existence right now thats like a few billion dollars right? the government can afford that. All they would have to do is buy anonymously and offer 10% more than the current price peoples greed would take over and it would then be fucked Bitcoin would become worthless in less than a week.
unless we have a way of protecting this? did not think so.
That's not how open markets work.
Many people wouldn't sell their bitcoins for such a low price. As the government bought up the available bitcoins, the price for the remaining ones would continue to rise (due to the surge in demand with limted supply). The increasing exchange rate would cause many other people to buy bitcoins hoping to make money on the rising exchange rate. This would drive the exchange rate even higher. It would quickly become prohibitively expensive for the government to buy all the bitcoins in existence (especially since 25 more bitcoins are being created every 10 minutes.
Meanwhile all the people holding bitcoins would make a lot of money on the huge investment bubble that would be triggered. Eventually the bubble would pop, and the price would come crashing back down. All those that made large amounts of money would have the opportunity to buy even more bitcoins at the new extremely low price.
I would disagree that this would necessarily create a bubble. The added demand would be from the government buying up the bitcoin only and would not be demand that the market would not otherwise see (apart from the government). So when the government were to stop buying the additional coins the price would simply stop rising.
I do agree with you that this would not at all do anything that would hurt/destroy bitcoin. All it would do is cost the government a lot of money. It would actually likely make bitcoin more secure because the block rewards would then be worth that much more giving miners a more incentive to mine, which would increase the hashrate, which would make the network more secure.