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Author Topic: Massive Spread Currently On Mt. Gox  (Read 4168 times)
zdmas
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June 13, 2011, 08:16:59 PM
 #1

Can anyone who's more familiar with economics explain how this can be remedied? The sell wave is pretty big now, and buy orders are diminishing.

EDIT: Now the spread's smaller, it used to be near $2 spread between buy and sell.
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Vandroiy
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June 13, 2011, 08:38:06 PM
 #2

It's all about whether some large money influx changes things or a bust occurs. In the latter case, you won't get much buying volume on there, and flattening fluctuations turns into desperate attempts to sell before the trend pushes prices further down. Since some people rightfully fear that happening, nobody really cares about temporary spread enough to fix that. Or maybe everything just happens too fast.

You are experiencing chaos by a force stronger than day-trading; stabilization takes time and a usable estimate on price. Just watch it unfold; it should normalize later.

If this becomes a panic, you won't be able to tell at all what will happen.
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June 13, 2011, 08:42:36 PM
 #3

It's setting up for another massive rally as soon as the panic selling stops.

EDIT: Anyone else having trouble with MtGox order entry again?

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Grant
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June 13, 2011, 08:52:58 PM
 #4

Signs of a potential correction again ?

We saw very low volumes when it traded around 20-22 today. Now it's been dipping towards that support level of $18 (which seems to be the cause of recent increase in spread, someone is selling at best-market offer), if it breaks we might be heading for another roller coaster ride. Better fasten your seatbelt Wink

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June 13, 2011, 09:24:37 PM
 #5

We just need more exchanges and fewer people holding onto BTC as an investment.  They're the irrational buyer/sellers and then people freak because Mt Gox can't handle the overload of requests.

Now accepting Bitcoin for the children's book "How to Keep Your Helicopter"
http://altanimus.com/product/how-to-keep-your-helicopter
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June 13, 2011, 09:28:12 PM
 #6

Looking at the hacked accounts being sold I am starting to wonder if these below market value huge lumps being sold could be related to someone trying to fast-sell and clear all stolen coins thus directly fking the market downwards.

...In the land of the stale, the man with one share is king... >> Clipse

We pay miners at 130% PPS | Signup here : Bonus PPS Pool (Please read OP to understand the current process)
ktomi
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June 13, 2011, 09:34:32 PM
 #7

Today it had low volumes that's true, but look at yesterday and the day before! There were record volumes between 15$ and 25$! Those people who bought there still have huge confidence in the market and they not going to give up easily.

Right now it feels like everyone is holding there grounds. There is a big number of buy orders at 15$. These people are looking to get in at a good price. Then there is a huge wall of sellers at 25$ and another huge wall at 30$ and many in between, mostly gathered around big players with 1000 to close to 3000 BTC in their pockets. If we look at the sellers up to the 30$ area, 65% of them in the 25$-30$ area. There is a good chance many of these are speculators who bought in earlier and I don't think they are going to retreat and lower their offers easily.

Also I think many people are just looking and trying to find out what is going on and haven't even placed any orders. More bank transfers may be on the way. Difficulty is still raising. Etc. Very interesting.
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June 13, 2011, 09:53:57 PM
 #8

I've got sell orders in the high end and buy orders on the low end.  I'm sure I'm not the only one.  Bear in mind, one can create orders without having the funds to fulfill them.  I'm pretty sure that those don't show up on the order book, but if you have several orders on the low end and several on the high end, you can bounce up and down for a long period of time without ever logging into your account.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
kylesaisgone
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June 13, 2011, 09:56:35 PM
 #9

People are wisening up to the fact that the economy is only supported by speculation. There's no marginal utility to BTC besides making quick money, and with the inherent instability of the economy which is based on nothing (which allows the outrageous speculation we've been seeing) people are shying away from the possibility of getting burned. People are going to continue to ride the speculation bubble until BTC becomes something of value, or it will cease to exist. It cannot survive on speculation alone, for entirety.

zdmas
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June 13, 2011, 10:05:59 PM
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People are wisening up to the fact that the economy is only supported by speculation. There's no marginal utility to BTC besides making quick money, and with the inherent instability of the economy which is based on nothing (which allows the outrageous speculation we've been seeing) people are shying away from the possibility of getting burned. People are going to continue to ride the speculation bubble until BTC becomes something of value, or it will cease to exist. It cannot survive on speculation alone, for entirety.

Good points, the price won't stabilize until there is some real world value here.
AyeYo
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June 13, 2011, 10:17:33 PM
 #11

It has nothing to do with economics.  Huge spreads happen with low volume.  The more volume the market has, the tighter the spread.

Enjoying the dose of reality or getting a laugh out of my posts? Feel free to toss me a penny or two, everyone else seems to be doing it! 1Kn8NqvbCC83zpvBsKMtu4sjso5PjrQEu1
zdmas
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June 13, 2011, 10:19:19 PM
 #12

It has nothing to do with economics.  Huge spreads happen with low volume.  The more volume the market has, the tighter the spread.

Volume looks high to me.
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June 13, 2011, 10:33:57 PM
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Good points, the price won't stabilize until there is some real world value here.
What products would you buy with Bitcoins if they were available?
zdmas
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June 13, 2011, 10:42:08 PM
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Video Games, clothing, hardware, software
MoonShadow
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June 13, 2011, 10:44:27 PM
 #15

Video Games, clothing, hardware, software

All of those classes of products are available via Bitcoin.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
zdmas
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June 13, 2011, 11:04:48 PM
 #16

Video Games, clothing, hardware, software

All of those classes of products are available via Bitcoin.

From an actual website, or via OTC, I prefer ordering from websites, and I've found the price volatility and stock of items are too difficult to combat when buying these products.
MoonShadow
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June 13, 2011, 11:16:38 PM
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Video Games, clothing, hardware, software

All of those classes of products are available via Bitcoin.

From an actual website, or via OTC, I prefer ordering from websites, and I've found the price volatility and stock of items are too difficult to combat when buying these products.

From both, but in every case the selection may be severely limited.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
Nath
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June 13, 2011, 11:19:07 PM
 #18

Spread isn't just a matter of volume, on most stock exchanges there are so called "market makers" who try to limit the spread and make some money in the process. It's primarily an automated process which is done by programs now. It only works because the market maker get special prices for their transactions and in exchange the market maker reduces the spread of a stock.

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zdmas
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June 13, 2011, 11:30:10 PM
 #19

Maybe that's what we need then, some HFT (High Frequency Trading) on Mt. Gox
Vandroiy
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June 13, 2011, 11:52:52 PM
 #20

Video Games, clothing, hardware, software

All of those classes of products are available via Bitcoin.
Let's make this realistic.

I'd like to buy one of the new AM3+ Asus Sabertooth mainboards, along with a befitting black edition Phenom and 1833 CL7 RAM with at least 5 year warranty, preferably from the same merchant, shipped to Germany speedily at competitive prices.

Can Bitcoin do that right now? I doubt it. There are a few dealers who can fulfill my request, but none accepts BTC! I would have to use some middle man magic, and nobody feels like doing that.

That's the thing. It's like saying Android has a good security model -- it's all good in theory, but the reality is: there's still a lot to do.
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