Bitcoin Forum

Markets not reacting to gox bankruptcy and loss of hundreds of millions of dollars worth of customer money is not just disturbing but confirms my earlier statements about market manipulation.

People here shrug gox bankruptcy like its nothing, but it is very huge and a major dent in bitcoin public confidence. This event has also delayed any major wall street institution from getting involved until there is a major regulated and licensed US exchange running.

In a way I'm glad this is happening as it confirms my position, as I stated before we will see a major dip soon on or before March 16

It is nothing - to anyone who didn't have funds on gox. They are and have been for months now a separate market. This just made it official.

Disclosure: I am secretly a whale with two million BTC and half a billion dollars and an agenda.

It's only disturbing to the media and person(s) who decided to leave their bitcoins on the internet.
Personally I don't even trust a bank in the end, so why would you trust magic the gathering online exchange.

They *may* have lost 800k bitcoins but theres still 11m other ones out there

Mt.Gox being bankrupt is not news. The markets have anticipated that for weeks now. This is why the price dropped from the 800s to where we are now in the last few weeks.

Bitcoin is being stress tested. Markets are holding because Bitcoin strong. Of course the press will tell you quite a different story.

It's called being "priced in". The markets HAVE reacted, that's why we're down in the 500s now.

That's not to say further bad news won't get us lower though.

Price is going down because speculators expect a panic or try to create/accelerate one, but if you think about it, Bitcoin investors now own ~500K less bitcoins then they thought they did. If anything that should eventually drive prices up.

Price going from $700 - $500 is far from being priced in. Im closely observing the market movements and I'm convinced of manipulation especially by Chinese players. The markets are already exauhsted and the fact the price remains in upper $500 is too good to be true. As I stated before there will be a lot of bankrupt Piglets buying in this range with the very last bit of fiat they got. The manipulators are selling off their expensive bitcoins to these piglets who will bleed soon once the market has no breath left.

I am confident that I will be proven right in the coming weeks, a v simple indicator is for u all to see just how exaushted the market is buying and selling at these lvls when hundreds of millions of dollars were just wiped out of the bitcoin economy

Wake up! Hundreds of millions of dollars were just wiped out of the bitcoin economy. This is no joke

There is HUNDREDS OF MILLIONS of fiat dollars less liquidity in bitcoin markets now, who will compensate for that? ONLY ONE WAY for Market to collapse to $300 or less

Wake up ppl! See the real picture be smart

I didnt say it was a joke. But if it turns out there is no gold in fort knox, would the price of gold collapse?

Please think, your not getting the big picture, read this topic:

https://bitcointalk.org/index.php?topic=493397.0

I find it had to believe that this Mtgox incident can be considered priced in when the volume in the exchanges are less than 5% of the number of bitcoins that exist and the fact that most large holders of bitcoins are sure as hell not going to trust any exchange to sell any large quantity of coins when they can be fucked so easily like Mtgox did.  

You gotta love the panic mongering sock puppetry doing the rounds

Gox is old hat, not irrelevant but not by any means critical

Holy crap the ignorance, who will pay back the hundreds of millions of dollars ??? Ask this question please.

Who the fuck will compensate the markets ?

There is HUNDREDS OF MILLIONS of fiat dollars less liquidity in bitcoin markets now, who will compensate for that?

ONLY ONE WAY: for Market to collapse to $300 or less

yeah, theres there are millions of dollars missing, BUT THERE ARE 750K BTC MISSING!!! Thats a much higher value than the dollars that are missing. please read topic i linked and think ik trough.

The missing bitcoins are irrelevant, because no one is going to buy or sell them. Its not even clear if they are missing or alreafy circulating the markets. What matters is there is hundreds of millions of fiat dollars missing these dollars matter because they r going to create the liquidity in the market that will buy ur overpriced coins. Now there is a massive chunk gone, the markets will collapse as a result to compensate.

Ppl have gotten so used to bashing fiat that u forget to calculate it in the bigger picture. U forget that bitcoin price depends on fucking fiat buying and sell it.

Did you ever stop to consider, that maybe it indicates that people (The market) have more confidence in the product than *you* do ? That *1* company going down *isnt "huge" ??

Perhaps they actually *understand that because a single company (amongst many) that dealt in a product went down due to the mismanagement and incompetence of its staff, that it isnt the fault of the product they traded ?

Or are you *really bemoaning the fact that your hopes to get your hands on this *irreplaceable product at a bargain price as the uneducated were hopefully spooked by the failure of a *distributor did not happen ?

"Darn, All this bad news, and they *Still aren't running scared and dumping ?  Why isnt the market reacting to this seeming bad-news ? What *is this thing they HODL so tight *worth to them ?"

All of you people trying to spread your FUD in *either direction for your short term personal gain remind me of spruikers at a market hawking your wares to try and make a sale by shouting the loudest.

Bitcoin should and *will succeed or fail purely on its merits and usefulness, not on how many uneducated people can be stampeded with pathetic self-serving attempts to tarnish its image and confidence for personal gain.

Has nothing to do with bitcoin confidence. Its pure manipulation that will end soon, the pigs will die.

Sez You  :P

For every argument why this should make the markets go down, there's an argument for why it should make the markets go up. Perhaps all these factors were already priced in. One that definitely changed is a reduction in uncertainty.

Nobody will.

If you want your coins back you'll have to buy them back at market rate.

Seems like Gox is really into something deeper.

There is no Fed pumping hundreds of millions of dollars into bitcoin to compensate for mtgox bankruptcy, There are no bailouts, the market rate will go down as a result soon, its the only way.

An amount of bitcoins close to 5% of all bitcoins currently in existence was just wiped away as fakes. And maybe 0.000001% of all dollars in existence. Probably not even that, I suspect gox still has the majority of its customers dolars.


You really dont get it. First of all, almost certainly, no bitcoins were actually lost, they were probably stolen many years ago.  But even if they did get lost, say EmptyGox lost the keys to their wallet, it doesnt matter. What matters is that bitcoin supply just shrank a whole lot now that people who had BTC balances at Gox realize their Gox BTC's were counterfeit BTC instead of the real thing. How does that directly hurt the valuation of the real thing? Again, if it turns out the US secretly sold all their gold 50 years ago and Fort Know is empty, or their gold reserve was swallowed by a sink hole, would you panic sell your physical gold?


The gox dollars are probably safe for the most part, but even if not, they represent a very small percentage of the bitcoin economy and ~zero percent of all dollars out there. And what you seem to forget is that the price also depends on people with ACTUAL non counterfeit bitcoins.  These just got a lot rarer than we thought, and those people probably a whole lot more reluctant to trust their BTCs to an exchange. Good luck replacing your counterfeit BTC with real BTC at a steep discount, you wont get mine.

If it turns out that the "lost" 800 kBTC still exist and can be spent by someone, that will definitely push the prices down.

Judging from Gox's fiat liabilities, the BTCs were mostly from an era when BTC was much cheaper than now. The hundreds of millions of $ never existed, the BTC were just sitting on Gox waiting to be sold at a much higher price.

The only thing disturbing is why so many Bitcoins were parked in an exchange. It indicates that people have no clue about Bitcoin and think it is something like Ven. Looks like we got some education to do.


What you call manipulation is just people buying or selling. Why would anyone panic sell their coins just because one Bitcoin business died when 1000s are currently being build up? Why would you panic sell when another Cyprus event can hit any time, but in a much larger economy like that of France? Do you think the big banks are in any way better than MtGox? I worked at some, e.g. Deutsche Bank und UBS and I can assure you: They are every bit as incompetent as MtGox seems to have been. And they are incompetent despite the fact that they have 100s of people working there who know better.

Get used to it: MtGox != Bitcoin.

I keep hearing this gox dollars don't matter and they never existed, while completely Ignoring the fact that real USD was being deposited in gox. Real USD worth hundreds of millions of dollars were deposited in gox and were creating liquidity in the bitcoin markets.

I also find it funny how ppl just say well too bad the gox clients will just have to buy their coins again at the current price. Um no, they won't fucking rebuy the coins no one will fucking rebuy coins, especially at the current rates.

This is like someone losing a ton of gold at a bank and then he's like oh OK NP let me just go buy another fucking ton , no it doesn't work that way cuz that person is depleted of money plus won't have the confidence for sometime to rebuy.

The markets will correct soon, remember there are no bailouts, which means the market can only go one way to compensate for this event.

+1

Translation: "I have sold at $400. Why doesn't it go below 200?"  ::)

Translation: "I have bought at $950. Why doesn't it go toda moon?" ::)

There are too many good news. If you look at it long term its not worth selling now. Its too late for that.

The pricing in of gox's failure began all the way back in May and June, when investors could not withdraw fiat, funds were seized by DHS, and there was the lawsuit with coinlab. At that point, investors probably assumed that all their fiat was missing and that gox was insolvent, since they couldn't withdraw, and the pricing in began. This caused a crash from $130 to $66, until offline investors decided that was a good price and led a recovery. Bitstamp rapidly grew in August with the orderbook growing exponentially every day, and during the breakout in October it was well known that Bitstamp was where true liquidity interchange in U.S.D. was occuring and that gox was no longer relevant. Gox became a joke. "emptygox". Gox probably put a nice damper on the entire rally, and we might have gone higher without it.

Just recently, gox led another crash. The drop from $800 began when users started having issues withdrawing bitcoin from gox. At the moment when gox announced their malleability issue and it became official that users could neither withdraw fiat nor btc, all hope in gox became lost. Gox was now truly insolvent, as you could not withdraw ANY funds. This became especially apparent once every other exchange had fixed their malleability issue, in one day, EXCEPT gox, who was at two weeks and counting.  The death spiral of prices on gox all the way to $88 was continually confirming everyone's suspicions - that kind of price action would not be happening unless something was seriously wrong. Nobody would sell their bitcoins at 15% of the real value of a bitcoin unless they were SURE gox was insolvent. So this action led a crash in prices all the way from $800 to $530 and below. When the website went down, prices crash all the way down to $400. That's a 50% loss from $800, on top of all the previous crashes gox had driven.

Prior to gox's recent bankruptcy announcement, it was about 90% certain to anyone with a brain that all of gox's customer funds had been lost, and this had already been getting priced in to the bitcoin price for nearly a year.  The bankruptcy announcement simply turned a 90% certainty into a 100% certainty. Big deal... Maybe it will cause a little dip, but not a huge crash like everyone is calling for - that already happened, multiple times.

Show me all the newbies investing the savings into an obviously fraudster scheme!

First we need compensation and trust and that means, that all Gox fraudsters go to jail.

No they werent. They were creating liquidity on gox, supporting a non zero price for GoxBTC which didnt exist.  This isnt very different from Pirate's ponzi. In both cases people lost fortunes in BTC they thought they had, but that didnt exist. IN this case some of the victimes may also have lose dollars, but what difference does that make? Its not like those dollars are being pulled from actual bitcoin markets, if at all, they are wiped out from a non existent fake market.

Thats it, Shout *Louder, that will convince people !

You're sounding a bit butt-hurt there.  Were *you one of the ones who were silly enough to believe Mt.Gox's years worth of lies and are now hoping to recoup your losses with a market dip ?  

How else would you personally know that "no, they wont fucking buy back in" ?  Personal Experience/Opinion ?  Or do you speak for everybody do you ?  Some people will run around crying.   Others *will suck up that *they got ripped by a con-man due to lack of caution and move on.  

Its not Bitcoin's fault, its *theirs. Maybe next time they'll do some research before leaving Mega-$ lying around in some half-baked "Exchange" that has suffered continuous problems and repeated hacks ever since opening.  Yeah, thats a good place to do business !..  Duh


Not everyone will run around shouting that "This will destroy the market !"  because they were stupid.

Repeat Tip.  Mt.Gox =\= Bitcoin.
New tip.       You =\= The Market

This.  Buy the rumor, sell the news.  The last two months' gyrations were the reaction you think ought to be happening now.

Stop these childish threads please. MtGox failure has been seen coming by many for more than a year now. The price dropped from 800 to 400 and then bounced which clearly shows it had an effect alright but not a devastating one. People who were not smart enough to pull out of Gox lost their money, that's life and I hope those who got stuck there have learned from this experience. Why would anyone who was not on MtGox and saw this trainwreck coming from miles away now suddenly want to dump all their coins? The market is not going to pay for the stupidity of others. MtGox is dead, Bitcoin shrugs and moves on.

Some will buy again, some won't. Just telling you the reality of the situation that's all.

Looks like my previous attempt at commenting went wrong. Let's try again:

Liquidity goes both ways. The goxBTC was providing (illusory?) liquidity to buyers while the goxUSD was providing liquidity to sellers. Now both are gone from the market. I don't see how you can say one side of the liquidity equation matters while the other one doesn't.

It's like losing your ton of gold at a shady merchants storeroom. If you lose it, deal with it. The gold was all good, but the location pretty bad. Same goes for the coins.
If you truely believe in your investment, you'll inevst another time - if you have the funds. It's not like your new investment is affected by your bad decisions in the past.. except for you chose a bank next time instead of shit

Don't worry, the reaction will come. The downtrend line you have been seeing in the previous month is still the effect of losing demand that came with China. MtGox's bankruptcy effects will start gradually with the media and general public taking more and more negative stance towards bitcoin, and that will cause more serious investors to distance themselves. The cultist nature of the bitcoin community makes the market react slowly, because there are many people with strong emotional attachment to the commodity itself and that causes denial.
I think that actually the main thing holding up the price right now are miners, who are holding their coins because with this price, there is no ROI with their ASICs. People underestimate how much stable flow of 3600btc per 24h counts, whether it will go for sale or for holding. But when new investments aren't coming, then there is a critical point where miners will just start selling their coins/asics to cut their losses and move on. Bitcoin has to be in a constant rise. Stability won't be enough to keep the price from falling because most of the people involved expect a rise, not stability.

Just hope that people open new exchanges in new geographical locations with untouched markets. In my opinion, it's the only way to bring forward a new solid rise. Until then, the traders are just selling and buying with each other, while money is slowly dripping out of the market.

Opening post is complete FUD bullshit, it's there to put the price down even more.

Exchange is not in any way equal to Bitcoin ecosystem, so no wonder the popularity is affected because many coins are lost, but it won't last too long until we see full recovery and insane rise again.

Bitcoin is hell of a lot more than fucking Mt. Gox.

Well, I've been telling people I know to buy BTC for a damned long time; friends, family, and coworkers.

I have since told everyone to sell everything, because we are going nowhere but down from here, until something good comes out of Gox. If that never happens? Then down to double digits.

Everyone thinking this is a good thing is 100% delusional.

+1
And that this story about gox is for the textbooks how prices are always smarter than one person (price = most efficient way to aggregate informations -> Hayek).

But informations can change quickly and so the price does.
+ because of panics, day traders and still not perfect information the price signal can be distorted, for sure.

You are awfully much into "everything" and 100%.

But Gox is dead. This is already in the current price. And there are quite a few good news out there. One of them is the meda attention about Bitcoin and teaching people that fractional reserve can be a bad thing.
Just FYI: I bought a few new coins with additinal fiat (not money from formerly sold bitcoins).

Letting a bad company crash and burn is a good thing. This is not bailout coin. Just like in nature, the strong survive.

Um, market is not reacting to hundreds of millions of dollars worth of lost BITCOIN - Bitcoins that either didn't exist, or will cease to exist for the forseeable future. That would indicate that the market is manipulared DOWNWARD, not UPWARD. And, in this case, the manipulator wouldn't be a malicious super-smart insider doing complex market analysis infront of a computer screen somewhere in China, but a mass of super-dumb news outlets that don't understand wtf is going on.

I seriously DO NOT GET why people are under the impression that somehow Bitcoin needs gox to exist. In my "bitcoining career" I have sent a grand total of 1 bank wire to gox, and a grand total of 0.06 BTC, and both of these were like a year + ago - unless you count my flipping on Bitcoinbuilder. My experience with all other exchanges has been much less shady and is just in general a lot less dubious, from day 1. So wtf did Gox ever contribute in the last 6 months? If people had just stopped using it when it started sucking months ago this wouldn't be happening. If it really needs to blow sky high just to finally get people to quit it, then so be it.

Gox is irrelevant, Maybe back when they were the only bitcoin exchange it would have been a big deal if they collapsed but now people have their choice of at least 5 different exchanges that i know of (im sure there are more), Anyone with half a brain left gox last year.

You shouldn't store your Bitcoins in an exchange anyway, It's just.. dumb... Make a paper wallet with bitaddress.org and keep them in cold storage, or make a blockchain.info wallet and keep the aes.json backup somewhere encrypted and secure (flash drives).

The world of Bitcoin is not for the unintelligent non-tech savvy people that can barely find the start button on their windows machine, At least half a brain is required to do business in Bitcoin land.

They almost certainly exist, so this whole "oh 6% less bitcoins, bitcoin should go up by 1000% because there are 6% less" thing is absolute bullshit.

And the defense of bitcoin doesnt need Gox? No, of course it doesnt need Gox. It needs investor confidence. And the death of Gox just siphoned every drop of it out.

We don't need stupid investors who can't tell the difference between bitcoin and gox. These type of people tend to buy high and sell low, creating a lot of volatility.

Gox gave investors plenty of reasons to stay away. All you needed to do was pay attention. I stopped using them right after their problems with heavy volume last year and the chaos it caused for the markets. It's terrible that it took this much to get people to quit using there exchange.

"Markets not reacting to loss of 100s of Millions of $ is disturbing"

"is disturbing" = "I'm disturbed because I sold/shorted and expected it to go lower. Now I'm trapped."

In a way I can understand OP's point of view, for example if a major investment bank like Goldman sachs tanks tmrw it would have a catastrophic affect on the stock markets and they wouldn't rebound within the same day.

However I think the main reason for this is that gox has been losing market share in the past 3 months, and you have a large number of holders this time holding $800+ bitcoins refusing to sell. And also miners are refusing to sell at current prices as it is almost a loss to sell right now.  These factors along with bitcoin's strong fundamentals are keeping prices above $500

You have to consider this from the point of view of bitcoin's newer investors, the big shots, who are throwing in a ton of fresh fiat at the $500-$1000 level. They're looking at bitcoin from a standpoint of the future, and the potential of bitcoin to become global currency. They are not looking at the past or the present and don't care about the drama unfolding in this feeble present exchange system. They're only investing because bitcoin is such a game changing technology that it is resilient, will work through this, and will still become a world dominating technology. They know that once the big boys enter, big U.S. exchanges are set up, merchant adoption really takes off, and wall street investors come in, all of this will be ancient history - a joke. They might be looking gox charts, gox volatility, and gox gross incompetence and mismanagement over years and think 'good riddance'. In fact all of these exchanges are a joke for them - they're all unregulated and mysterious. For example, I went to prepare my taxes and I cannot even find any kind of tax documents on any exchange I use. These exchanges are like.. bitcoin is still in kindergarten. New investors are just waiting... for the moment all of this, this legacy system, goes away and bitcoin gets serious with a real infrastructure. Any time they can buy and get in before the revolution is a great price. Any time they are not in a risk that tomorrow some new U.S. company makes an announcement and prices skyrocket.

The difference is between companies that have a slow and steady meltdown like Enron and MtGox, and companies which are seemingly OK like Bear Stearns and Lehman Brothers but catastrophically fail.

The market prices in meltdowns as everyone sees it happening. It is the catastrophic failures which catch the market by surprise, except for insiders who have sold much earlier.

I'm just one datapoint, but that is exactly what I did in 2012 when I lost nearly all of my coins in Bitcoinica. I balked at the price (around 10 USD) and I did not buy as many as I lost but re-buy I did. (Of course, I avoid counter party risk like the plague now and keep everything in offline cold storage).

The reason I lost is because I misplaced trust in people, not because of a failure of the technology behind Bitcoin.

If you get scammed on the internet you also don't stop using it. You don't give up, you wise up.

The lost 800 kBTC don't exist. Mt Gox doesn't have them. 800,000 Bitcoins that people thought were held at Mt Gox we now know did not actually exist. The only Bitcoins that do exist were already in circulation, already pushing the price down.

You are a rare minority. And while it payed off for you this time, it doesnt always.

There will only ever be 21 million bitcoins. For the sake of argument let's say 500k were lost. So ~2.4% of all bitcoins in existence were lost. This is as if you raided the COMEX and dropped the gold into the sun. All bitcoins in existence just became more valuable because of the loss. The well known effect of deflation is in effect. You could even argue that the fiat is locked away in the holders of bitcoin who didn't have their bitcoins on Gox.

I'm not selling and I have your fiat's value locked into my bitcoins. There are plenty of others like me. Gox users tried to get their fiat back when they sold off to ~$100. Mt Gox didn't have the fiat to let them because they couldn't trade it for bitcoins.

I feel for Gox users but the truth of the matter is that I have been enriched by their loss.

OP is hoping that the bitcoins have been stolen because then the thief might sell them off. And he is hoping the thief isn't a hodler. If the thief is then his selloff will never happen.

I will hold till the collapse of the dollar or zero. So will my idealistic brothers.

Gox is a terrible blow but bitcoin don't care. Bitcoin is a fucking honey badger.

Most day traders have absolutely zero awareness of the adoption levels, propogation throughout the world right now, infratructure going up, ATM's being installed, etc, etc etc.

Most day traders' only awareness is the idiotic number on the market graph, and nonsense headlines from mainstream media sources.

This is why most day traders are bewildered that the price stays steady, after the Bankruptcy.  

Because like most people who are just trying to play the Bitcoin market, they don't have a clue what's going on out there, to prop up this price.

A substantial foundation is growing every day.  % of the price consisting of speculation is dropping every day.  This is why the price hasn't moved.  Others know what they're investing in.


-B-

it's like a tug of war between good news and bad news

OP is an idiot. Many traders already left gox six months ago. Gox is not bitcoin. Gox is irrelevant now. Do you know much btc the chinese buy every hour?

http://fiatleak.com

Lol... trading back and forth.. is not buying.

Gratz you just described Gox.

Consider this, if WhatsApp is worth 19 Billion to Facebook and depending on which reports you believe, 10B to Google, how is Bitcoin worth only 3 billion (rough market cap at 300/btc).

There are other instant messenger apps, but their mind/market share of 400 million users was worth a premium.

I personally think Facebook would have been better served by building their own app or buying a smaller startup with better tech and paying $500 to the 1% most interconnected users to switch (cost ~10% of what they paid). If that wasn't enough throw $10 to all of the rest of the users to switch and it's still half as much as they paid and they don't have a poorly developed, security hole ridden pile of legacy code to fix.

They purchased it for the European marketshare not the software.

How is millions of $'s lost?! Get the facts right, the bitcoins are still there, it is just in different hands. Could it be possible the drop in price from 800~ to 500~ only due to the stolen bitcoins being dumped onto the various exchanges?

Is this a fact or just a wild speculation?

Gox seems to be claiming that they lost the privkeys to their cold wallet. Good job, if that's the case. A sane company holding that kind of money would have created some kind of multiply-redundant offline solution and spent a lot of money for keeping the privkeys safe. A million dollars a year would not be exaggerating it.

The thing is, Gox's business model was actually valid and sound, and they made quite a bit of money in the past couple of years. Even though they lost some of it, unless the fiat and coins went somewhere, they ought to have had a lot more than the 2kBTC and the $20 million. The BTC holdings should be at least several dozen kBTC.

Buying and selling is not relevant for the value. There are block rewards increasing the amount of coins, and there are lost coins. In my opinion, both of these are also mostly irrelevant. In a grander sense, the number of coins is fixed.

What is happening, is that people around the world are constantly reconsidering what value they place on a coin. That includes people that yesterday valued it to 0 or did not consider it at all, but today value it at something. That is, the market participants are constantly reviewing their valuation.

The price expressed on the market is a result of each of these individual valuation changes.

There are no dollars nor renminbis "going into" bitcoin. This is a false model.

Why should people who so their Bitcoins if they were not affected by mtgox? That's like if you lose your car keys and I have to sell my car because of that. Totally irrational.

It's more like I just witnessed a bad car crash and I decide to stop driving because I am in shock.

It's speculation. But I believe it's the most consistent explanation for the information available -- Gox was believed to have over 700,000 Bitcoins when in fact they didn't have anywhere near that many. This "deficit" accumulated over time.

Where do you see them claiming that?

The problem with the Bitcoin exchange business model is that proper security is expensive and annoying. In the past, customers have believed exchanges when they simply say they are secure. So there was a perception that there was no need to spend more money on additional security -- it wouldn't bring you any more business. The problem has been that there has not been a significant financial incentive for exchanges to actually be secure.

If it turns out Gox actually lost access to Bitcoins that are now stuck in wallets nobody has the private keys to, that's a different situation entirely. Either way, it should be good for Bitcoin in the long term.