Bitcoin Forum

You are probably familiar with the notorious WillyReport:

http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/


"Somewhere in December 2013, a number of traders including myself began noticing suspicious bot behavior on Mt. Gox. Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January."


Whether the work of hackers (who in that case stole all the MtGox bitcoin and were the real reason for Gox bankruptcy) or a conspiracy by Karpeles, The two bots (Especially Willy) accounted for quite some buying power during the bubbles.

Some have suggested that the bots were not a hack nor a conspiracy, but simply "a bot/API for high value clients":
http://www.reddit.com/r/Bitcoin/comments/26is61/the_simplest_explanation_is_usually_the_right_one/
In that case, the underlying implications of the Willy Report (some of the buys were made with "infinite fake fiat") would be false.


With the constant current downtrend in BTC price that we are all witnessing BTC users are trying to find an answer to what's happening.
So, do you think Willy and Markus "fake infinite fiat" was behind the last two BTC bubbles, or you think the explanation for the current downtrend has nothing to do with this?

I think they would have played a big role in the bubbles, but the real trigger was real interest in Bitcoin, beyond any manipulations therein. The current downtrend is simply the common folk not seeing a reason to own any BTC, they don't see in what ways BTC would improve their lifes as of right now unless they think the price will go REALLY high in the future (at this point the commmon folk cant invest a lot of FIAT into this beyond say 1 BTC). And they aren't going to risk their salary into hoping a coin goes to 2K in the next years, they would rathe spend it on a holidays and whatnot. We need to show a real reason to own BTC for the common folk and make it easy as hell to obtain then. They are put off by exchange verifications and so on.

The bubble was almost certainly the sole work of the MtGox bots.  They didn't create the entire bubble, they just drove it.  That in turn sucked more speculators in as they bought with the belief of doubling their money within a few weeks.  If you're running the largest bitcoin exchange and no one is checking your books, you're pretty much free to do whatever you want.  Karpeles got caught running a fractional reserve exchange and couldn't stop despite having the higher price per bitcoin for months.  People smelled something bad and wanted out, trouble is MtGox suddenly had mysterious trouble paying out.  How odd.

Since the demise of MtGox there have been small attempts to reinflate the bubble but nothing has really worked.  I'm frankly surprised we're not sitting much lower than $375 right now.

Bears with financial gain if price drops (OP): of course, Willy caused all of bitcoin gains!!!


Everyone else: has willy been proven? Wasn't gox like 10% of global volume in the last runup with China then as now leading?

Perhaps disclose you are short before posting fud?

Maybe not all of them, but if you look at older screenshots of the Gox market you can see clear patterns where something was jumping prices back up every time there was a dip. It looks like a heartbeat.

Are you talking about me? I just posted the poll trying to be as neutral as possible and to let people discuss about what I think is an important topic.

They were a contributing factor. I was not around for the jump to $32 but the explanation for that one was that all of the Bitcoiners believed the Bitcoin would be huge and when the price started going up they thought "this is it" and drove the price up with wild enthusiasm.

We have had a few of those moments.

Fair enough. I read your post very quickly, on re-reading it is actually balanced. My apologies!

you forgot though to post an option of "no, the willy bot rumors are illogical and unsubstantiated", all your options imply that it is a fact that these bots drove the rally, or even existed in the first place, which is still up for debate.

All the options imply that they existed not that they drove the rally. Option 5 implies they existed but didn't change much.



The Willy and Markus trades were clearly visible on the leaked Gox Data.
Are you saying you don't believe that leaked data was in fact from Mtgox?
Or simply that the author of the Willy Report makes too many assumptions?

PS: I added your option in the poll.

MtGox was 10-20% above the other exchanges for a very long time.

People at other exchanges looked at how non-existing BTC was bought with non-existing USD at emptygox at higher and higher prices and bought the other exchanges as a result.

There was also a handful of people allowed to do "arbitrage" (which really wasn't) and they market bought the other exchanges without a second thought since those select few could immediately sell at an immense profit at MtGox - which was great for them until that "profit" vaporized along with their initial investment.

MtGox bots were definitively a big factor. They were certainly not the only one (China was and still is the most important factor) but they did have a big impact.

x Missing option:
The bots acted as a catalyst, increasing the bubble well beyound reasonable size. Likely BTC were bought with none existing fiat.

Personal conclusions (ymmv):
The $/BTC price would have never reached the "real" levels. Ranges of 200-300 $/BTC would have been more likely.
The resulting blow to the BTC ecosystem will have long reaching consequences (MTGox wasnt the first, but the biggest) resulting in lost invester confidence.
The resulting spike resulted in to much enthusiasm. This caused unreasonable expenses in directly attached "industries". Especially mining companies will go broke. The attached "stink of fail" will linger for a long time.

Personal opinion:
The bots were very bad for BTC, while the short term price increase looked nice the consquences are detrimental.

Agree completely with your points.  Especially with the bots being a catalyst that took whatever bubble was happening and "teased" it up faster and higher than it would have gone on its own.  Lots of money was pouring in; from China especially.  The bots amplified it.

Don't know if them, but I'm pretty sure the last bubble at least has linked to GOX in some sense and would not start without them.

That's why I doubt we will see another bubble any time soon

So why did all the other exchanges rise?

sheep following.

emotional panic

no active brain cells

They were a factor but in the end it was China getting into the game. Lots of people getting into Bitcoin=price rise. And because Bitcoin is such a limited commodity it doesn't take millions of individuals to drive the price up exponentially. It doesn't seem like it now, but coins become pretty scarce on the exchanges when buy pressure becomes immense. This is the reason the price rockets up: Once traders believe there is a strong bull market, they take their coins off the books to sell at a higher price.

Then they banned it, the price dropped, they unbanned it, the price went up, banned again, price down, etc until all the original Chinese speculators were out of the market.

It's an easier explanation to believe than a bot, or group of bots, could supply that much buying pressure.

I think the current price drop also contributed by someone unknown

Arbitration

https://bitcointalk.org/index.php?topic=21456.msg269034#msg269034

MTGOX and Satoshi seems to be up to no good.

Very good points.
Negative consequences about mining companies going broke, very true.

 

Whoever and whatever caused that bubble it did wonderful things for Bitcoin.

There would be no millions and millions of VC money, no Paypals and Overstocks without media coverage and public interest that bubble produced. All that is making Bitcoin infrastructure more robust and that can't do bad thing for Bitcoin.

Prices go up and down on all markets, bitcoin is nothing special in that. Just look EURO and GBP these days. It's a bear market and of course there's no confidence within investors. When that turns up, you'll see plenty of interest.

It's a market, nothing more. Some lost money, some made a killing, some, like me, failed to realize lot of fiat gains, but that's the game.

Anyone who says the BTC price would've hit 1200 without Willy Bot, isn't aware of the facts.

They are the reason the price went that high.   There was nothing "organic" about those price increases whatsoever. 

And now that they're gone, we have proof of that.

-B-

My opinion, too.

Yes, they created interest in Bitcoin which did increase its real value, in effect. But, they've also left many bagholders and delusional hodlers who think bubbles are a natural,repeating phenomena.

This is why the price will always trace backwards, until a real market attracts big buyers. Will that ever happen? Maybe. But until then, up and down with an overall downwards slope.

Bots were the Viagra (plumbing), but for an epic fuck you need fuel (testo) and excitement (dopamine) too....

Gox bots were behind every BTC bubble.

I don't think they were behind the bubble. Those are all part of the world's only non-regulated speculative market. The bubble was popped by Gox losing 450k bitcoins. Now people are spooked by unregulated exchanges. Volume will return when people have confidence in exchanges again.

If not directly the indirectly in both ways there are in the game.
Who knows what will they do next.

Fun idea - no basis in fact -
The gox bots were run by asic manufacturers - driving the price to silly high levels to justify exhorbitant prices for mining equipment, they have now run off with the fiat and delivered the room heaters.