Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[gizmoh]

I really don't understand how BTC-E would loose their own money during this scenario.  Could someone please explain?  If someone was overleveraged BTC-E would initiate a margin call and the customer would loose money not BTC-E.

Thanks in advance.

Cheers!

I found a couple other guys that have a limbus withdraw from BTC-e.

Getting scary somehow.

My theory seems plausible now:

https://bitcointalk.org/index.php?topic=178336.msg5060684#msg5060684


" Btc-e is taking Huge risk , they are GAMBLING with Customers USD deposits by allowing 1:3 leverage. If those are indeed forced liquidations, btc-e suffered millions in loss."

When leveraged trading, the money borrowed to buy btc comes from btc-e.
A Margin call during a price collapse of 600%, 30% margin required isn't sufficient to cover the loss which is now bored by btc-e.
Trader ends up with a negative balance, which represents btc-e loss.

[biafore]

It about to get ugly tonight

[c0dex]

The last few weeks have made me feel as though bitcoin is a long, long, LONG way off from truly mass adoption. If I were a business, no way would I want to introduce this kind of volatility into it. As an individual, it hurts to see just how unstable bitcoin has been lately because one day I have x amount and by the next hour, I might have something worth only a fraction of that investment!

I'm still in, but I see a long road ahead.

The crazy thing is that we are way better off now than we were even a year ago. I was told that it used to feel like the wild west at the beginning with so many hackers and DDOS attacks on the exchanges which seemed like a daily occurrence a year or two ago.  We have come a long way but we still are enjoying some of the fun of being early adopters!

I've been here for about 1.5 years so I absolutely remember how it was. My fear is that it's not ready for mass adoption yet and that all these things that keep happening reiterate that.

As adoption grows the problems will show themselves for what they are, as in the case of Mt. Gox right now.  With Second Market announcing intentions to develop an exchange we are starting to see that the much needed infastructure is being built in front of our eyes.  This is why Gox's demise is probably a really good thing and the fact that it happened now, before Wall Street is throwing money in, is actually helpful in the long run.  It is a bit painful for us but if someone said that Gox going down would only cause the price to tank around $100 then I would have said that was a good trade in the long run.  Maybe I am crazy.

Yes, this was a long time coming since Gox has been such shit for so long. Good riddance! (and no, not crazy!)

[c0dex]

It about to get ugly tonight

How so? Even uglier than Gox?

[600watt]

new poll

bearish, if not fatalist, as hell

its what everyone is asking themselves...

this is the depression or fear phase of the bubble

It will all work out.

Some of the news is actually bullish out there today telling everyone that now is a good time for new investors to get in and that Western Union needs to watch out for BTC
http://www.ibtimes.com/bitcoin-buyers-market-price-drop-brings-opportunity-new-investors-1554418
http://finance.fortune.cnn.com/2014/02/10/bitcoin-western-union-zipzap/

Western Union guy says:

"We can move [bitcoin] across our wires to the receiving entity."

wow. such powerful bank.


edit: typo

[magicmexican]

stamp - gox difference growing, i like

[mellowyellow]

Is Gox down? I'm getting gateway error.

[medialab101]

Is Gox down? I'm getting gateway error.

No, just slow loading

[Dragonkiller]

Is Gox down? I'm getting gateway error.

unfortunately not

[Kouye]

"We can move [bitcoin] across our wires to the receiving entity."

Please read: "we can also charge you for bitcoin transactions, if that's your wish, no problem!  "

[magicmexican]

Overall i am amazed how Gox managed to fail so much over the years from the top1 exchange to a complete shithole.
How do you even ruin a business like that, it looks hard to do even if you try.

[solex]

Overall i am amazed how Gox managed to fail so much over the years from the top1 exchange to a complete shithole.
How do you even ruin a business like that, it looks hard to do even if you try.

In 2012 when I first heard of MtGox I thought they had so much potential that they were going to be the next monster company like Google or Facebook. Instead they imploded like Flappy Birds.

[mah87]

Overall i am amazed how Gox managed to fail so much over the years from the top1 exchange to a complete shithole.
How do you even ruin a business like that, it looks hard to do even if you try.

In 2012 when I first heard of MtGox I thought they had so much potential that they were going to be the next monster company like Google or Facebook. Instead they imploded like Flappy Birds.

Just like bitcoin will implode soon and will be replaced by Ripple

[bitdig]

Not really, you have $100, they give you $200 more, so you play with 300$, when you open/close position they charge you 5% on 300$. To lose all your money you need bitcoin to go down by 33%...

I am talking about leveraged longs. BTC-E is a leverage trading platform via Meta Trader. Pretty sure this was a string of forced liquidations.

They should not allow monstrous leveraged positions to be build up that are larger than their own thin order book, this is just insane.

Right, Btc-e is taking Huge risk , they are GAMBLING with Customers USD deposits by allowing 1:3 leverage. If those are indeed forced liquidations, btc-e suffered millions in loss.

[solex]

Overall i am amazed how Gox managed to fail so much over the years from the top1 exchange to a complete shithole.
How do you even ruin a business like that, it looks hard to do even if you try.

In 2012 when I first heard of MtGox I thought they had so much potential that they were going to be the next monster company like Google or Facebook. Instead they imploded like Flappy Birds.

Just like bitcoin will implode soon and will be replaced by Ripple

Ah, I had forgotten about that thing. Did a quick search and found this:

Ripple is what happens when a turd drops in a toilet.

I think that image ^ explains what ripple really is.  

[mah87]

Ah, I had forgotten about that thing. Did a quick search and found this:

Ripple is what happens when a turd drops in a toilet.

I think that image ^ explains what ripple really is.  

Again , people who can't see what ripple is are narrow minded

and if you think bitcoin is not a bubble you are RETARDED

[Protagonus]

Here's a neat snippet from one of the big ripple supporters.

Finally then, since all currencies are held by these gateways;  no individual actually owns anything correct?  EG at 100% market integration - 100% of the global value would be in the legal possession of these "corporation gateways", correct?

That's right. In theory, you could lose some or all of the entire amount that you are trusting to the gateway.  This is why Ripple will not replace Bitcoin! When you need to reduce your counterparty risk to zero, you will use bitcoins. When you need to pay a bill in fiat, you can use Ripple to pay for it with your bitcoins. Ripple complements Bitcoin.

Uhh, yea.  Another debt based economy Woo Hoo.  

[spooderman]

I want moar waves. Knife catching is fun

[siggy]

Not really, you have $100, they give you $200 more, so you play with 300$, when you open/close position they charge you 5% on 300$. To lose all your money you need bitcoin to go down by 33%...

I am talking about leveraged longs. BTC-E is a leverage trading platform via Meta Trader. Pretty sure this was a string of forced liquidations.

They should not allow monstrous leveraged positions to be build up that are larger than their own thin order book, this is just insane.

Right, Btc-e is taking Huge risk , they are GAMBLING with Customers USD deposits by allowing 1:3 leverage. If those are indeed forced liquidations, btc-e suffered millions in loss.

So question... being the exchange, knowing their order book, and controlling the trades:  Wouldn't they front run all other market orders to get their force-liquidation trades in as close as possible to the 33%?  Even if bitcoin crashes 80% it isn't a binary "was here, now there" process.. there were many standing orders in between that would have gotten processed...   Seems to me it would be very easy for them to limit/mitigate their risk.  

Heck, knowing their market orders, they could even front run and force liquidate before the 33% and actually come out ahead.  

[BitChick]

I posted this in the press section too. This is a great article, especially for us hodlers.

http://siliconangle.com/blog/2014/02/10/bad-news-is-good-news-for-bitcoin/