mtgox claims $5 to $20 million per day incoming funds...

[RationalSpeculator]

The funds will subside when the hype runs out.

Nicely summarized

[XXthetimeisnowXX]

The funds will subside when the hype runs out.

oh its just gettin started my friend. just cuz we have heard about "the bitcoin" doesnt mean 90% of people have, more like 1%.

[Sword Smith]

Inflows: Between $5 million and $20 million / day

Outflows: $300k to $1 million / day

That would mean that on average around 15M USD flow into MtGox per day,probably less.
If we discount the rougly 700k USD flowing out we are still at around a 14M USD surplus.

Given that MtGox EUR and USD markets account for around 70 % of the volume on all exchanges, that makes the total money flowing in to the Bitcoin economy roughly 20M USD/day.
http://bitcoincharts.com/charts/volumepie/

At a current market cap of 1400M USD that increases the total market capitalization around 1%/day. Price has been closely related to the market cap in the past, so we can assume that by this 1% increase of market cap a 1% increase in price is justified.
http://blockchain.info/de/charts/market-cap?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

What we have seen over the past 7 days, since the 50USD bottom, is a 23% increase per day. Lets assume we have found the new equilibrium at around 120 USD now, we could expect a 1% price increase per day to be backed and thus justified by the growth in market cap. Anything above that would be unsustainable and deemed to correct itself.

Thoughts?

It does not work like that. If you expect the price to grow 1 % per day, then everybody wants to join that market and they will do so even if they only get .5 or .1 % per day since this is higher than the so-called risk-free interest rate.

So the market participants will seek to find the equilibrium faster than you describe since this investment seems to beat most other investments.

And don't listen to Smoothie's analysis. He is obviously clueless about the most basic things in investments.

[BubbleBoy]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

[Sword Smith]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

Are you willing to bet 1 BTC on this?

[BubbleBoy]

I've actually made an offer of 10.000$ for less than 100$ @3month, see my posting history.

[dacoinminster]

People, you are grasping at straws and you are sheep.

Relevant XKCD:

[Spekulatius]

Inflows: Between $5 million and $20 million / day

Outflows: $300k to $1 million / day

That would mean that on average around 15M USD flow into MtGox per day,probably less.
If we discount the rougly 700k USD flowing out we are still at around a 14M USD surplus.

Given that MtGox EUR and USD markets account for around 70 % of the volume on all exchanges, that makes the total money flowing in to the Bitcoin economy roughly 20M USD/day.
http://bitcoincharts.com/charts/volumepie/

At a current market cap of 1400M USD that increases the total market capitalization around 1%/day. Price has been closely related to the market cap in the past, so we can assume that by this 1% increase of market cap a 1% increase in price is justified.
http://blockchain.info/de/charts/market-cap?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

What we have seen over the past 7 days, since the 50USD bottom, is a 23% increase per day. Lets assume we have found the new equilibrium at around 120 USD now, we could expect a 1% price increase per day to be backed and thus justified by the growth in market cap. Anything above that would be unsustainable and deemed to correct itself.

Thoughts?

You forget that the Bitcoin marketcap is not really the "real" marketcap. Many coins are lost or in cold storage. At least half were lost last time i heard. Which means that the marketcap of the movable coins is alot smaller than 1400M USD and that is why the price moves faster than 1% per day.

Good point! I guess "half" is a bit much, but 30% of those coins could probably regarded a save guess on the lost or unmovable amount of coins. That would take the current market cap from 1400M USD down to 933M USD.

[TheKoziTwo]

You can deposit as much as you want. But impossible to withdraw. :-)

- It is easy to deposit $1,000,000 => ( 7,500 BTC )
- if you want to withdraw then limit is 100 BTC/DAY (2 month to withdraw)

Withrdaw USD ?
- wait weeks to get verified
- wait another week until they change limit
- $50k USD is monthly limit (20 months if you want to withdraw $1,000,000) or ask  Foreign and Commonwealth Office for APOSTILE and mail them to Gox

Yes i'm really pissed off with their arbitrary rules, why is it not necessary to verify with legal apostille documents when sending $1 million but is an obligation for withdrawals..

It's not really that big of a deal. I did it and my withdraw limit is now 40 000 BTC per day, didn't check the USD limit, but if you got that much cash you want to withdraw surely you can afford spending a couple of hours getting that apostile done.

[Sword Smith]

You can deposit as much as you want. But impossible to withdraw. :-)

- It is easy to deposit $1,000,000 => ( 7,500 BTC )
- if you want to withdraw then limit is 100 BTC/DAY (2 month to withdraw)

Withrdaw USD ?
- wait weeks to get verified
- wait another week until they change limit
- $50k USD is monthly limit (20 months if you want to withdraw $1,000,000) or ask  Foreign and Commonwealth Office for APOSTILE and mail them to Gox

Yes i'm really pissed off with their arbitrary rules, why is it not necessary to verify with legal apostille documents when sending $1 million but is an obligation for withdrawals..

It's not really that big of a deal. I did it and my withdraw limit is now 40 000 BTC per day, didn't check the USD limit, but if you got that much cash you want to withdraw surely you can afford spending a couple of hours getting that apostile done.

If you want to withdraw fiat from Mt. Gox., you can buy bitcoins and sell them to a local dealer

[Spekulatius]

New envelope calculation!

April 10th 2013: The bubble has reached its highest peak of 266 USD at a nominal market cap of 2614M USD (2.6 Billion $$$). The ensueing consolidation around 120 USD suggests a "true market cap" of 933M USD during the last peak if we take into account that roughly 33% of all coins in existence are currently inaccessible (lost) or will not move till some time after the next bubble (cold storage or long time savings) [1400M USD (1.4 Billion $$$)*0.66= 933M USD]

Since April 10th 2013 around 20M USD daily have flown into the Bitcoin economy through the exchanges, adding up to 280M USD to date or 30% of the "true market cap" (933M USD) of the bubble's peak.

May 10th 2013: One month later and 600M USD will have grown the Bitcoin economy, raising the level of April 10th' "true market cap" by 64% to 1533M USD. If there would be another bubble rocket by then it would have 64% more fuel to fligh to the sky.
If this day would mark another peak, it would range at 437 USD/BTC (1.64*266USD/BTC=437USD/BTC)


Can we assume that the market cap during a consolidation period after a bubble has burst indicates it's "true market cap"?

Can we also assume that the size of this true market cap indicates the hight of the next bubble?

[smoothie]

I've actually made an offer of 10.000$ for less than 100$ @3month, see my posting history.

Only $10?

Please dont waste our time.

[smoothie]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

Quoted for future bump.

[eclipse81]

I would hope he meant 10,000 USD since he used 3 zero after the decimal point.A 10$ bet would be laughable.

[ElectricMucus]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

Quoted for future bump.

[jubalix]

There must be a lot of Fiat money then just sat in Gox accounts not being traded into bitcoins

[smoothie]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

Quoted for future bump.

[oakpacific]

I see no reason for Mark to make this up. No sir, no reason at all. It's not like in the last two weeks mtgox made more money than in it's entire history. It's not like rapid appreciation and volatility is making him richer than Satoshi Nakamoto. Cmmon guys, is there was really a bubble that burst, would he be lying us ?

Let's not forget about the people trapped in MtGox waiting to be verified. Another one of mark's bedtime stories. People, you are grasping at straws and you are sheep. Regardless of this here dead cat and "return to normal", the bubble is done and price will succumb to less than 50$ in less then 3 months.

Gox made more during the high volume days than during the low volume days, the last week when the crash was in full force should be their highest grossing week ever, whether you calculate by total bitcoin/fiat volume. So using your own logic, Gox should try to create as many crashes as possible, rather than pleading people to calm down.

Besides, even if Gox's plan were to accumulate as many bitcoins as possible, and betting on its rise in exchange rate, the only place to cash out such a huge amount of bitcoins would be their own exchange. So if I were Mark, the best strategy seems to be just charging fees in dollars so they make money regardless of the price movement.

Not to say that you have no fact at all to back up your accusation.

Please educate yourself before you talk.

[robamichael]

Inflows: Between $5 million and $20 million / day

Outflows: $300k to $1 million / day

That would mean that on average around 15M USD flow into MtGox per day,probably less.
If we discount the rougly 700k USD flowing out we are still at around a 14M USD surplus.

Given that MtGox EUR and USD markets account for around 70 % of the volume on all exchanges, that makes the total money flowing in to the Bitcoin economy roughly 20M USD/day.
http://bitcoincharts.com/charts/volumepie/

At a current market cap of 1400M USD that increases the total market capitalization around 1%/day. Price has been closely related to the market cap in the past, so we can assume that by this 1% increase of market cap a 1% increase in price is justified.
http://blockchain.info/de/charts/market-cap?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

What we have seen over the past 7 days, since the 50USD bottom, is a 23% increase per day. Lets assume we have found the new equilibrium at around 120 USD now, we could expect a 1% price increase per day to be backed and thus justified by the growth in market cap. Anything above that would be unsustainable and deemed to correct itself.

Thoughts?

(emphasis added is mine)

Interesting, especially considering the post-crash consolidated market cap you introduce in a later post - however, I think this all relies on what price is chosen for "equilibrium," and that cannot be defined outside of the current market derived price.

No matter how we spin it, the price of bitcoin currently represents a storm of emotion, speculation, hype, and lacking infrastructure. There is no fair way to determine the "true" value of a bitcoin, or any good, outside of a market. And the market at this time suffers from so many exterior extremes, that the price at any one moment can not reasonably be taken as a stable equilibrium.

Just my take on the situation. I hope you continue to expand this analysis!

[jubalix]

The funds will subside when the hype runs out.

oh its just gettin started my friend. just cuz we have heard about "the bitcoin" doesnt mean 90% of people have, more like 1%.

I agree...further even if people have heard of it only a fraction will buy in at this stage