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[BitcoinEXpress]

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[abednego]

Maybe.

Even though MtGox has the largest trading volume there are other exchanges.  Prices will go up and down on those exchanges and people taking advantage of arbitrage will make the market agree with what the entire economy currently values BTC.  They would have to be using a large reserve of fiat and BTC to buy/sell users' bids and asks to maintain the price at their chosen equilibrium.  Unfortunately, as noted, MtGox has a larger total trade volume than all the other exchanges combined.  So it remains in the realm of possibility.

However, my theory is that the market price remains representative of a 3 month Return on Investment (ROI) for mining gear hardware at the current difficulty level.

[BTC Economist]

Can't happen.  Mt. Gox does not set the price.

[DonnyCMU]

Well... I saw the occurrence of fake bid walls before... on Saturday

setting a huge ($150k worth) wall at $15.00 and see the price spike above the wall...
then, the the price comes down, and start eating into the wall, the wall 'vanished' after realizing the attempt pump has failed.

It may not me Mt.Gox, may be some rich early adopters, but I would certainly call it market manipulation.

[EskimoBob]

Well... I saw the occurrence of fake bid walls before... on Saturday

setting a huge ($150k worth) wall at $15.00 and see the price spike above the wall...
then, the the price comes down, and start eating into the wall, the wall 'vanished' after realizing the attempt pump has failed.

It may not me Mt.Gox, may be some rich early adopters, but I would certainly call it market manipulation.

Wall did not vanish magically! Look at the trade volume and stop spreading horse shit on your face.        

[being]

It was up for about a thousand of BTC from 6k to 5k... before mister who-ever-it-was removed it. It was not fake. The guy probably just changed his mind, when he realized, that he could get them at a better price later...

[HideousBeastManGuy]

Can't happen.  Mt. Gox does not set the price.

It absolutely CAN happen.  No exchange is being upfront with their own trading in the markets, and I have pretty strong reasons to believe that they are involved in trading in their own markets.

[SlaveInDebt]

It's a $100 million market cap being maintained by big holders/early adopters is my theory. Been stated by Gavin Anderson in New York Times and Mr.Garzik owner/operator of Bitcoinwatch.com on CBS that they feel the market cap is $100 million. Both early adopters likely holding large shares in BTC.

http://www.nytimes.com/2011/07/04/business/media/04link.html

The coins, which trade for about $17 each at online exchanges, have a cumulative value of about $100 million. “I do think of it as the market cap of Bitcoin,” said Mr. Andresen.

http://www.cbsnews.com/8301-504943_162-20069780-10391715.html


My tinfoil hat theory, you decide.

About a month ago during the CBS interview the owner/operator of Bitcoin Watch said the same thing about a 100 million dollar market cap. Yes that's assuming if all the coins would be sold at ~$15 at the current number of BTC. It does take an small amount of coins to move the market, more the reason it would be simple to let go a few here and there each time the 100 million cap gets broken to bring the market cap in check. This would create stability to an extent and also give the big players capital to buy up coins should the market start to fall again helping maintain the balance and cap. Watching the market as of late it seems a correction occurs each time the markets wonders off from the 100 million cap, we've been moving around that wall all day and working towards that mark for the last week.

I am skeptical of my own theory I must admit but I see some reasoning behind why some would do this. The stage has been set. The network has it's power, the market a substantial value and now it's time to introduce innovative and refined was and means to use this system for a larger market of goods and services all the while making more ease of use in day to day transactions. Once that phase is implemented the demand for a larger market cap will be seen. Reason for the cap now? Only to keep Bitcoin from turning into a mere speculators tool that could not be sustained much larger than the current market cap unless there is more substance and real use of Bitcoin as a currency.

[mmortal03]

If you guys would just look at the long term chart, you'd realize that what is happening right now has already happened a handful of times in the past.  It's actually pretty cyclical: http://bitcoincharts.com/charts/mtgoxUSD#rg360zczsg2010-09-01zlztgCzm1g10zm2g25

[tymothy]

Unless they're trading money they don't have, they really can't, or it would be enormously expensive to do so and would require a massive amount of bitcoins they own.

[Nagle]

I suspect that Mt. Gox may be front-running, putting in their own trades ahead of the queue. During periods of high activity, Mt. Gox users complain of their orders not being processed for several minutes. That's when front-running is likely. Front-running is a low-risk high-profit way to trade, because you get to place your bet after the race has been run.

Holding the market flat, though? No. Exchange information won't help there. Only large amounts of money will.

[MKW2012]

I highly doubt it. If anything they would be trying to create volatility to cause wild swings in both directions to pump up the volume resulting in more trading fees. Flat markets generally have lower volume anyways.

[grod]

I suspect that Mt. Gox may be front-running, putting in their own trades ahead of the queue. During periods of high activity, Mt. Gox users complain of their orders not being processed for several minutes. That's when front-running is likely. Front-running is a low-risk high-profit way to trade, because you get to place your bet after the race has been run.

Holding the market flat, though? No. Exchange information won't help there. Only large amounts of money will.

They don't even have to front run during trading.  They have data on how much currency of what type is arriving in real time and can base longer term positions on that.  In other words, if they see a large amount of bitcoins coming in they can lighten their position.  If they see a large amount of dollars, go long.

Dwolla has a slightly dimmer picture and only for dollars.  But there are at least two entities with trading information you don't have.

[HideousBeastManGuy]

I highly doubt it. If anything they would be trying to create volatility to cause wild swings in both directions to pump up the volume resulting in more trading fees. Flat markets generally have lower volume anyways.

Regardless of whether or not you think some of us in this thread wear tin foil hats or not, this forum, and the bitcoin community as a whole, would be better off assuming MtGox DOES compete with its customers.  I personally think it's almost a certainty they participate in the markets, which means that there's a reasonable chance they do something underhanded (simply because they can).  To address your actual point, there would be huge money to be made in front-running the Darkpool orders who think they are safe from the eyes of the public.

I'm not accusing anyone here, I'm simlpy stating that I've seen some weirdness on MtGox as well, and I'm NOT going to give them the benefit of the doubt.  Other exchange owners seem to agree with me as well, like Jered from Tradehill.

I think a site should absolutely disclose if they are dipping into the markets as well, and I think everyone on this forum should get on board.

[vokain]

they're doing it again