Several months of moderate growth, one week of rapid growth, yesterday one day of big crash. What is the facts behind?
So there was this announcement from pirateat40 yesterday (
https://bitcointalk.org/index.php?topic=50822.msg605957), that he closes his investment fund. Is this it?
I find this pirate thing interesting. I understand he has promised high yields (7%/week? 3000%/year? wow) on bitcoin investments into an undisclosed business, so many people sent him money, and now yesterday he ends this operation and is going repay the investors.
What could have been his business?
A) BTC currency trading - it's somewhat questionable that even a skilled trader with a big wallet could manipulate the market so badly so he could gain such yields.
B) Something seriously illegal like trading arms - which would be a real shame, actually including all those who invested.
C) Something banally illegal like a pyramid scheme - at the moment there is still no proof speaking against this.
D) Something else.
BTC offer before:
I think that in cases A) B) the BTC were available for trading on the market.
In the case C) the BTC were not available and rather held in a wallet.
BTC offer after:
Cases A) B) - If he repays his debts - the BTC will be available on the market.
Cases A) B) C) - If he runs away with bitcoins - BTC will be sold at the speed proportionate to the speed of bank withdrawals from Mt.Gox
I think that traders are very moody when acting on this news. I can't see much extra offer of bitcoins based on anything else than moods. We learn more next week