Bitcoin is back in the limelight after its price skyrocketed in April, causing an upturn and increasing its value to almost $9000 from less than $4000 at the beginning of this year.
New paths for Bitcoin
Millionaires are increasingly often investing in the most popular cryptocurrency. Dadiani Syndicate was founded by art dealer Eleesa Dadiani, who first began to use Bitcoin and cryptocurrency a few years ago in response to demand.
Last year, Dadiani Fine Art, in cooperation with blockchain platform Maecenas Fine Art, made headlines after putting 49% of Andy Warhol’s 1980 work “14 Small Electric Chairs” up for sale for Bitcoin and other cryptocurrencies.
“When I founded the institution it was a way for people to cash out of their cryptocurrency assets” – said Dadiani in a Forbes interview. “But we found there were people who wanted us to assist them in buying enormous amounts of Bitcoin”.
The Dadiani Syndicate is described as a “peer to peer network,” with people trading between each other; Dadiani claims her role is to put together people who want to sell and those who want to buy, just as she does in the art world
“One of our clients approached us and said they were interested in acquiring 25% of all bitcoin currently available,” Dadiani said. “There are a number of entities who want to dominate the market.”
A quarter of all bitcoin currently in circulation, including those bitcoin that may be permanently lost, is around 4.5 million and worth a staggering $38 billion at current exchange rates.
Dadiani said this kind of accumulation is not possible to “realize” but her company has been instructed, “to scour the markets and gain access to as close to 25% as possible.”
According to Greenspan’s estimates, of the 21 million bitcoin that will ever exist, “many will not be mined for a long time and many more are lost for good.”
An increasing number of millionaires is interested in buying large amounts of cryptocurrency
“Yet even a greater number of coins are currently being held by hodlers [a name for long-term bitcoin holders] who will not be willing to part with them for any price,” Greenspan wrote in a note to clients. “Realistically speaking, there are probably less than 5 million coins actually circulating at the moment.”
One of the biggest challenges for Dadiani is how to buy large amounts of bitcoin without affecting the market.
“People buying large quantities of bitcoin want to avoid slippage,” said Dadiani. “The only way to do this is to avoid exchanges.”
Slippage is the difference between the expected price of a trade and the price at which the trade is executed and can be made worse by periods of higher volatility, something the bitcoin market is especially prone to, and when a large order is made in a low volume market.
Dadiani claims to have built up a consortium of sellers from around the world who have “colossal” amounts of bitcoin or who want to buy significant amounts and she is confident they have all been properly vetted against money laundering regulations.
“We don’t deal with people who are not clients of reputable banks,” said Dadiani. “We are market makers, coordinators of these trades. Once you involve banks and institutions, it’s up to them to make sure their clients are abiding by regulations.”
The Dadiani Syndicate is currently in the midst of its fourth trade, all of which have been “very large volume” and each taking weeks or months to complete. The Dadiani Syndicate receives a percentage of each trade; a brokers’ fee.
The trades so far have all been well into the millions of dollars, made up of thousands of trades per day.
