Crash is inevitable on MtGox (soon)

[MoreFun]

When Gox will solve their withdrawal problems the insiders will start selling, then Gox will sell quite a chunk of their holding (price will fall quite much) and release the news about solving their withdrawal process. Then the crash is inevitable (not flash crash and flash rise like the SR one).

Maybe we will see a small rally before so insiders and Gox will get even more profit.

[alp]

When Gox will solve their withdrawal problems the insiders will start selling, then Gox will sell quite a chunk of their holding (price will fall quite much) and release the news about solving their withdrawal process. Then the crash is inevitable (not flash crash and flash rise like the SR one).

Maybe we will see a small rally before so insiders and Gox will get even more profit.

Anyone with Bitcoins can withdrawal Bitcoins and sell on another exchange.  It's the people who are stuck with cash on Gox that are the ones waiting to get out.  If anything, they move cash to a cheaper exchange, and buy there.

No one has coins stuck at Gox.

[Birdy]

yes, it will crash all the way down to Bitstamps level  

[MoreFun]

Exchange is not so much about reality than it is about human psychology. Doesn't matter how much people really need withdrawals. And withdrawal problems solved news on falling price is the trigger. Think about that.

[Tzupy]

A price drop can happen soon, but IMO it won't have anything to do with Gox fully resuming withdrawals (which may take months from now).

[cowandtea]

Well, its just temporary crash. After awhile they should be back to the price of Bitcoin..

[qwk]

yes, it will crash all the way down to Bitstamps level

Actually, it might crash a little further.
When they solve the withdrawal issue, we'll all be used to see that 10-USD-difference between Gox an Bitstamp as "given".
So, once Gox' price goes down, so will Bitstamp's.
That could lead into a nice little flash-crash.
But yeah, eventually it will level out and be done with it.

[Birdy]

yes, it will crash all the way down to Bitstamps level

Actually, it might crash a little further.
When they solve the withdrawal issue, we'll all be used to see that 10-USD-difference between Gox an Bitstamp as "given".
So, once Gox' price goes down, so will Bitstamp's.
That could lead into a nice little flash-crash.
But yeah, eventually it will level out and be done with it.

Yes, there are people who will speculate and will try to sell and buy more, so it probably would go down a little further, but level out soon enough.
I just wanted to say that I think the word "crash" is an exaggeration for this, if you remember Bitcoins past.

[Lohoris]

Prices at Gox are artificially high due to fiat withdrawal problems, and prices on Bitstamp are artificially low due to many people withdrawing fiat for them.

wat.

Prices on Bitstamp are correct since they have no problems neither with deposits nor with withdraws on either currency.

Saying that they are artificially low just because mt.gox's one are artificially high doesn't make sense.

[SheHadMANHands]

Prices at Gox are artificially high due to fiat withdrawal problems, and prices on Bitstamp are artificially low due to many people withdrawing fiat for them.

So then, more than a crash, i expect the price at the two exchanges to balance: Gox prices will be going down a little and prices on Bitstamp will be going up a little until those two are balanced again, nothing to care about very much

This seems correct to me.  If Gox announced that withdrawals will resume unimpeded tomorrow, there would be a rush to sell on Gox, in an attempt to get a [now] inflated price for each bitcoin.  At the same time, there would be a rush to buy on Stamp, in order to quickly turn around and sell on Gox at the inflated price.  I imagine Gox would fall more, and Stamp would go up just a little in the process.  If Gox were trading at $140 and Stamp at $130 before the news, they might both settle at, say, $134 immediately after the news.  

Considering this would be good news for bitcoin, and assuming no other breaking news, I'd expect the price of bitcoin would continue to crawl up for the few days following such news.  At least, that seems logical to me..

[theonewhowaskazu]

Prices at Gox are artificially high due to fiat withdrawal problems, and prices on Bitstamp are artificially low due to many people withdrawing fiat for them.

wat.

Prices on Bitstamp are correct since they have no problems neither with deposits nor with withdraws on either currency.

Saying that they are artificially low just because mt.gox's one are artificially high doesn't make sense.

It sort of does make sense, if you think about it.

Think about it. Say you sold on Gox. You sell on Gox (now the price is "fair", because all markets are working so far) and try to withdraw. Only, you can't. So what do you do? You buy from Gox (making the price artifically high) move it to Bitstamp, and sell there (making the price there artificially low).

[Lohoris]

[quote author=Lohoris link=topic=309703.msg3325753#msg3325753 date=1381593757Think about it. Say you sold on Gox. You sell on Gox (now the price is "fair", because all markets are working so far) and try to withdraw. Only, you can't. So what do you do? You buy from Gox (making the price artifically high) move it to Bitstamp, and sell there (making the price there artificially low).

This is the wrong part.
You "are selling", hence "the price goes down".
It's not artificial, it's the normal result of someone selling.

You think "mt.gox price is high, hence this high must be balanced somewhere, so bitstamp is low".
Partly right.
Yes it must be balanced somewere.
No it's not on bitstamp.

BTC price on mt.gox is higher.
Balanced by USD price on mt.gox, which is lower.

Other prices are correct (per definition!) unless they have other reasons to be artificial themselves (such as difficulties on deposits, withdrawals, high fees, risky, etc.).

[ElectricMucus]

What makes you think mtgox withdraws gonna resume?

[theonewhowaskazu]

[quote author=Lohoris link=topic=309703.msg3325753#msg3325753 date=1381593757Think about it. Say you sold on Gox. You sell on Gox (now the price is "fair", because all markets are working so far) and try to withdraw. Only, you can't. So what do you do? You buy from Gox (making the price artifically high) move it to Bitstamp, and sell there (making the price there artificially low).

This is the wrong part.
You "are selling", hence "the price goes down".
It's not artificial, it's the normal result of someone selling.

You think "mt.gox price is high, hence this high must be balanced somewhere, so bitstamp is low".
Partly right.
Yes it must be balanced somewere.
No it's not on bitstamp.

BTC price on mt.gox is higher.
Balanced by USD price on mt.gox, which is lower.

Other prices are correct (per definition!) unless they have other reasons to be artificial themselves (such as difficulties on deposits, withdrawals, high fees, risky, etc.).

*sigh*

Look: You agree that arbitrage makes the prices between to prices "fair" by raising the price of the lower-priced exchange and lowering the price of the higher-priced exchange, right? What I just described might be called "inverse arbitrage": A seller is forced to buy on the higher-priced exchange and sell on the lower priced exchange, making prices "unfair" by raising the price of the higher-priced exchange and lowering the price of the lower-priced exchange. That should be pretty obvious. Hence bitstamp is "artificially low" and gox is "artificially high." By "artificial" I mean not due to normal market conditions, but due to being unable to withdraw fiat from gox.

Another way of thinking about this would be to remove the "artificial" factor, and see what happens then, right? Well, a huge arbitrage opportunity would emerge. Which would reward what? Buying on Bitstamp (raising the price there, making it "fair") and selling on Gox (lowering the price there, making it "fair" as well, because at this point everything is "fair" because there isn't any artificial force exerted on the market).

[SheHadMANHands]

[quote author=Lohoris link=topic=309703.msg3325753#msg3325753 date=1381593757Think about it. Say you sold on Gox. You sell on Gox (now the price is "fair", because all markets are working so far) and try to withdraw. Only, you can't. So what do you do? You buy from Gox (making the price artifically high) move it to Bitstamp, and sell there (making the price there artificially low).

This is the wrong part.
You "are selling", hence "the price goes down".
It's not artificial, it's the normal result of someone selling.

You think "mt.gox price is high, hence this high must be balanced somewhere, so bitstamp is low".
Partly right.
Yes it must be balanced somewere.
No it's not on bitstamp.

BTC price on mt.gox is higher.
Balanced by USD price on mt.gox, which is lower.

Other prices are correct (per definition!) unless they have other reasons to be artificial themselves (such as difficulties on deposits, withdrawals, high fees, risky, etc.).

Price on Stamp is currently "correct".  If USD withdrawals on Gox resumed, the price on Stamp would go up I believe, based on the logic from my previous post (above).  The price on Stamp is therefore suppressed, at least to some degree, by the situation on Gox.  

[Erdogan]

[quote author=Lohoris link=topic=309703.msg3325753#msg3325753 date=1381593757Think about it. Say you sold on Gox. You sell on Gox (now the price is "fair", because all markets are working so far) and try to withdraw. Only, you can't. So what do you do? You buy from Gox (making the price artifically high) move it to Bitstamp, and sell there (making the price there artificially low).

This is the wrong part.
You "are selling", hence "the price goes down".
It's not artificial, it's the normal result of someone selling.

You think "mt.gox price is high, hence this high must be balanced somewhere, so bitstamp is low".
Partly right.
Yes it must be balanced somewere.
No it's not on bitstamp.

BTC price on mt.gox is higher.
Balanced by USD price on mt.gox, which is lower.

Other prices are correct (per definition!) unless they have other reasons to be artificial themselves (such as difficulties on deposits, withdrawals, high fees, risky, etc.).

Price on Stamp is currently "correct".  If USD withdrawals on Gox resumed, the price on Stamp would go up I believe, based on the logic from my previous post (above).  The price on Stamp is therefore suppressed, at least to some degree, by the situation on Gox.  

Correct sir  

SheHadMANHands: Rubbish, there is no correct price.

This is what is going on: There is arbitrage, the price difference is only momentarily more than about 14 USD higher on gox (that should be expressed in percent, but I could not be bothered to do that myself). The reason is that the depth is higher on gox, so it is possible to do larger trades, and gox was the best exchange historically. The ask depth is higher than the bid depth, the reason is that the gox customers predict a price hike and therefore wants to be in bitcoin, not in USD. They have parked their bitcoins on relatively high asks, just to be able to take advantage of a sudden upwards price spike. The customers believe they will get their funds out eventually, that is also what I think. Some have fiat channels out (remember gox change automatically between fiats), they are now arbitraging, the rest can get out via bitcoins.

[Le Happy Merchant]

yes, it will crash all the way down to Bitstamps level  

As bitstamp rises.

[fattypig]

Please crash, I would love to buy some cheap Bitcoin.

[cowandtea]

Please crash, I would love to buy some cheap Bitcoin.

Err... you didn't take advantage of the Silk Road incident?

Whoops.

I believe most people are panic at that time

[maursader]

Please crash, I would love to buy some cheap Bitcoin.

Err... you didn't take advantage of the Silk Road incident?

Whoops.

Oh the irony. I had money in transit with my exchange for about a week, but was held for verification as the SR seizure went on. Literally saw BTC at $80 wanting to buy in but the exchange didn't bother doing a verification call till a few days after that ordeal. I'm still pretty disappointed in them over that. Now I have plenty of fiat, waiting for the next flash crash.. Damn.