If Mt. Gox collapses, what would be the influence on the price?

[el_rlee]

Topic says it all, Mt.Gox smells mighty fishy to me. What if it turns out to be all smoke and mirrors?

My guess: Bearish in the short term for sure...

Also refer to:

0.25 BTC Bounty - Show me a Mt Gox USD Withdrawal
MtGox withdrawal delays [Gathering]
bitbet.us - MtGox out of business by end of year

[massivebitman]

Um no... I'm sure that will have absolutely no impact on the price, whatsoever

[DavidBAL]

Ultrashort term, bearish. When Bitstamp crosses MtGox trading volume, very bullish. Decentrialization is what's needed for long term success, but it's a painful process getting there.

[SOSLOVE868]

if MT.GOX crashed, then it will result large sells order in BITSTAMP or other exchanges ...ultimately rise sell pressure on BTC itself...= huge price drop

[el_rlee]

Might be the last time for really cheap coins - better keep some fiat on the side!

[wonkytonky]

lol nice try there op

[Wagner2014]

good observation OP...

there are many things that could push the price up or down...this is a volatile, high risk 'investment'...it is apparent some ppl do not want to acknowledge that and instead believe it'll double in price every X months without ever going down...

[SOSLOVE868]

good observation OP...

there are many things that could push the price up or down...this is a volatile, high risk 'investment'...it is apparent some ppl do not want to acknowledge that and instead believe it'll double in price every X months without ever going down...

Risk is everywhere, invest in anything could lead losing your money. prepare for the reward also the risk ,people should acknowledge about their ability of bearing the risk...

The only thing is do not put all your money into one investment, spreading your risk by diversity is always a good choice.

[notme]

The only thing is do not put all your money into one investment, spreading your risk by diversity is always a good choice.

That's one strategy.  But if you believe Andrew Carnegie:

Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.

[ElectricMucus]

Ultrashort term, bearish. When Bitstamp crosses MtGox trading volume, very bullish. Decentrialization is what's needed for long term success, but it's a painful process getting there.

I'm sorry but this is bearish all the way down.

[SOSLOVE868]

The only thing is do not put all your money into one investment, spreading your risk by diversity is always a good choice.

That's one strategy.  But if you believe Andrew Carnegie:

Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.

I put 80% of my BTC into ASICMINER...And concentrated my attention on them.....

[DavidBAL]

Ultrashort term, bearish. When Bitstamp crosses MtGox trading volume, very bullish. Decentrialization is what's needed for long term success, but it's a painful process getting there.

I'm sorry but this is bearish all the way down.

Fairly accepted that recent price movements have been a function of liquidity needs by both confidence weakened speculators and die hard bitcoin believers (even if you're starting a bitcoin company, your expenses are still denominated for the most part in fiat and those costs are relatively fixed) If people can not make cash withdrawals from MtGox, they will buy bitcoin on Gox (with existing fiat) and sell them on an exchange that can provide timely withdrawals.. As the spreads widen, people will be incentivized to deposit fiat onto alternative exchanges as the coins for sale are significantly cheaper than Gox.. at some price point bitstamp becomes the deepest book... once that happens the downward pressure from MtGox outflows will be effectively stemmed and BTC will discover a new price floor... if MtGox eventually brings back timely withdrawals, arbitrage traders will return some liquidity to gox but not nearly as much as it lost.. IMO things don't normally go textbook style like that but basically this is what will happen.

Why is this bullish mid-long term? Obviously bitcoin can not survive with a centralized exchange system (in the extremities) so a more decentralized exchange ecosystem actually increases the security of the entire bitcoin economy and makes it less susceptible to massive price shocks.. let me reiterate this process must happen for bitcoin to survive, but it's not accomplished by traders voluntarily leaving gox- they have to have a financial incentive and that incentive necessitates this kind of pain. It is better it happens now then later when some government thinks that to stop bitcoin all they need to do is attack the largest exchange.. without decentralization, this kind of lop-sided exchange risk will weigh down the value of btc..

TL;DR price does not equate to value.. decentralization is a necessity/healthy for bitcoin economy and improves under lying "value", price is simply representative of short-term liquidity needs oscillating around that value..

[ElectricMucus]

a) Only very stupid people wire money into gox while they can't get it out, and Bitcoiners aren't that stupid. But they won't leave either since they wanna take advantage of the good prices at gox. So gox is a zero sum game.
b) Miners and other people with excess Bitcoins sell them on other exchanges since it would be even more stupid to sell them on gox.
c) The recent crunch was initiated by other exchanges and gox followed, gox is already under 50% in USD and under 60% overall.
d) The need for sound infrastructure doesn't suddenly make it happen.

[DavidBAL]

a) Only very stupid people wire money into gox while they can't get it out, and Bitcoiners aren't that stupid. But they won't leave either since they wanna take advantage of the good prices at gox. So gox is a zero sum game.
b) Miners and other people with excess Bitcoins sell them on other exchanges since it would be even more stupid to sell them on gox.
c) The recent crunch was initiated by other exchanges and gox followed, gox is already under 50% in USD and under 60% overall.
d) The need for sound infrastructure doesn't suddenly make it happen.

I basically agree. What you're describing is a liquidity issue.. especially agree with point d. That is why this is mid-long term bullish, price rediscovery is what makes it happen. Ultimately Gox will either fail when depth disappears which will mark end of outflows, or will reinstitute timely withdrawals which will let them maintain some diminished role but promote decentralization. Either way the crisis is temporary and will be resolved by the end of the year.

Edit: End of year is my opinion, everything else I described is simply the chain of progression in a liquidity driven event.

[dave111223]

Ultrashort term, bearish. When Bitstamp crosses MtGox trading volume, very bullish. Decentrialization is what's needed for long term success, but it's a painful process getting there.

How is bitstamp overtaking gox "decentrialization"

What we need is 10 or 20 new exchanges that pickup all the slack.

[DavidBAL]

Ultrashort term, bearish. When Bitstamp crosses MtGox trading volume, very bullish. Decentrialization is what's needed for long term success, but it's a painful process getting there.

How is bitstamp overtaking gox "decentrialization"

What we need is 10 or 20 new exchanges that pickup all the slack.

All alt exchanges will benefit to a degree, but investors look for the deepest book. As a hypothetical, imagine a scenario in which Bitstamp is the largest exchange with 40% of volume, and Mtgox is behind them with 25%, the rest is spread over other exchanges.. that would be a much more decentralized system then Gox handling 80% of volume.. In this hypothetical I would expect Bitstamp to suffer a similar fate in several years..

[CMMPro]

It would be great if all the exchanges could link their order books online.

That way it would be a truly decentralized exchange network, where you could have your account with an exchange you trust and you could buy and sell bitcoins as a passthrough from any exchange in the world.

Fee's could be split similar to how real estate fee's are split, sellers exchange vs buyers exchange...

[Cluster2k]

If MtGox collapsed (with the risk of taking all the bitcoins and money with it) it would severely depress bitcoin's price.  I wouldn't be surprised to see 80 to 90% falls within hours as speculators panic and try to withdraw money from the bitcoin system while they still can.

[DavidBAL]

It would be great if all the exchanges could link their order books online.

That way it would be a truly decentralized exchange network, where you could have your account with an exchange you trust and you could buy and sell bitcoins as a passthrough from any exchange in the world.

Fee's could be split similar to how real estate fee's are split, sellers exchange vs buyers exchange...

Called an Alternative Trading System.. more appropriately for Bitcoin an ECN (electronic communication network).. basically matches trades across multiple exchanges. Multiple companies are working on this right now... I think coinsetter's platform launches in a month or so.

[Kluge]

It would be great if all the exchanges could link their order books online.

That way it would be a truly decentralized exchange network, where you could have your account with an exchange you trust and you could buy and sell bitcoins as a passthrough from any exchange in the world.

Fee's could be split similar to how real estate fee's are split, sellers exchange vs buyers exchange...

Called an Alternative Trading System.. more appropriately for Bitcoin an ECN (electronic communication network).. basically matches trades across multiple exchanges. Multiple companies are working on this right now... I think coinsetter's platform launches in a month or so.

Wouldn't everyone then place orders on the "meta-exchange" which could probably be done for a lower fee? I'd imagine maybe a .5% commission if done on the meta-exchange's books/engine, but it lists everywhere else for a .6-1.2 commission, and if it gets filled elsewhere, the order-placer pays the fee of the exchange which filled it? That'd be similar to what Bitfinex did - dunno about other implementations...