If a government, corporation, or individual bought up almost all the Bitcoins in the world, what would happen? In theory, based on the law of supply and demand, the act of buying up almost all available Bitcoin would result in several things.
First, it would drastically decrease supply, while demand from investors, traders, and users would at least stay constant and probably increase significantly from speculation caused by the price spike that occurs when someone is single-handedly buying up all the Bitcoins. When there is less supply but the same or increased demand, then price rises.
What it would take
Such an operation would require extreme secrecy and a globally-coordinated effort. One way to do this would be to open accounts on every single cryptocurrency exchange in the world, which would require bank accounts in almost every country, as well as opening accounts on all peer-to-peer trading sites like Localbitcoins. Additionally, accounts should be made with over the counter (OTC) trading desks like Circle. Beyond this, an effort should be made to contact and make deals with all the biggest known holders of Bitcoin and anyone else with Bitcoin. This is such a large task overall that an entire company with many cryptocurrency experts would probably have to be formed to pull this off successfully.
Bitcoin purchases would also have to be made across all the exchanges in the world simultaneously for all Bitcoins that are at a reasonable price within a range of average price. The price of Bitcoin would rise drastically during the initial purchasing, followed by a continued rally as speculators across the world try to make profits from the rapidly rising market.
Buying up Bitcoin could also be done over time; probably easier but more costly and time-consuming.
As of this writing on 16 July 2018, there are BTC 17.15 million in circulation, with another BTC 3.85 million that will be mined over the coming years. It is estimated that perhaps a few million Bitcoins have been lost, which would mean supply is significantly less than the total number in circulation, but this cannot be confirmed since a lost Bitcoin looks no different than a normal Bitcoin on the blockchain. The market price is near USD 6,670 which yields a market cap of USD 114.5 billion.
Based on the market cap, theoretically, someone with around USD 100 billion could buy almost all the Bitcoins if purchased at the current exchange rate. Obviously, this isn’t how it works in reality. Bitcoin would cost progressively more as they were being purchased and it would be practically impossible to purchase all the circulating Bitcoins. Even with the best effort, millions of Bitcoins would probably still be held by other people.
Who could pull it off?
The richest man in the world, Jeff Bezos, has USD 150 billion. He could single-handedly buy up almost all of the Bitcoin available for purchase if he wanted to, but only if he could get them all at the same price they were today. It gets even easier for a corporation to achieve this: Apple has USD 375 billion of assets, more than three times the Bitcoin market cap and there are many other corporations with such wealth.
A nation’s government could easily do the same. The United States had a budget of USD 3.98 trillion in 2017, only a small fraction of that would be needed to buy up almost all the Bitcoin available. This is made even easier by the fact that the United States sells bonds that are considered the gold standard of the bond market, so the United States could issue USD 200 billion of bonds that would be bought up instantaneously for this operation, effectively not having to pay a dollar of its own money.
It cannot be accurately estimated how much profit would be generated from buying up almost all the Bitcoin in the world, since it depends on how much would be left in the hands of others. One rough way of estimating is to assume that there would still be USD 100 billion invested in Bitcoin from all other people in the world, based on the current market cap. If BTC 1 million were left, this would translate to a price of USD 100,000 per Bitcoin. If only 100,000 Bitcoins were left, then Bitcoin’s price would be USD 1 million.
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