2013-09-03 How Bitcoin Spreads Violate a Fundamental Economic Law

[zakoliverz]

http://www.forbes.com/sites/beltway/2013/09/03/how-bitcoin-spreads-violate-a-fundamental-economic-law/

The “law of one price” used to hold. Last fall and winter bitcoin prices at the two big exchanges typically differed by less than 2 percent, a reasonable range given exchange fees and the cost of money transfers:

[Foxpup]

*sigh* Why did I waste my time reading this?

It makes sense that customers will pay a premium to get their money out. But who is willing to take the other side of the trade, selling bitcoins in return for “Mt. Gox dollars”?

What about the people who want to receive a premium to compensate for not being able to get their money out? Might those people be willing to take the other side of the trade?

[teukon]

So the Mt. Gox price isn’t a clean measure of a bitcoin’s value. Instead, it measures the value of a bitcoin plus the desperation of Mt. Gox’s customers.

But that still leaves a puzzle. It makes sense that customers will pay a premium to get their money out. But who is willing to take the other side of the trade, selling bitcoins in return for “Mt. Gox dollars”?

Ow!

I've read a lot of dumb stuff this past month but this made me actually cringe to the point of pain!

@zakolivers.  Could you add:
"CAUTION:  Extreme author stupidity.  Reading can lead to self-harm."
to your post.

Thanks.

[Gabi]

So now bitcoin is officially unlawful? Outlaw?