Mt. Gox's final impact on BTC...

[Jr65]

I don't know anything about bankruptcies/Court liquidations in Japan. If they are anything like their American counterparts, they can go on for years and can get very expensive, depending on complexity. The points made earlier in this thread about supply and demand are huge! What happens if the Court finds a few hundred thousand more coins? Selling 200k is a hell of a task, imagine selling 400k. In my limited opinion, (and I'm happy if I'm proven wrong!) Mt. Gox's bankruptcy case and its potential impact on us is the biggest threat to BTC right now. Forget about mass adoption, price stability and Wall St./Institutional/Big Fund money buying in. If the Mt. Gox bankruptcy case floods the Market with coins, there is no telling how severely the price of BTC could be damaged. If you think I'm trolling for cheap coins, think again or tell me why this is not an enormous problem.      

[djangocoin]

Wtf is that? They tested nukes on dinosaurs? How is that even possible, isnt there like.. a 500 year time-span difference!? 

Chicxulub asteroid

[molecular]

Talking about Mt. Gox's final impact on BTC, I have to warn that from now on Bitcoin exchanges will find it extremely difficult to deal with the banks. Mt Gox had accounts with some of the Japanese banks, and therefore these banks have to answer to the criminal investigations now. This is going to affect Bitcoin exchanges really bad, as the banks are well connected world wide.

time to install mycelium bitcoin trader wallet?

[kooke]

Even if the coins are sold to private buyers off-exchange, the price is still going down. There's going to be a lot more supply than demand and the people buying gox's coins won't need to be buying any from exchanges for a long time. Not to mention the negativity in the media when people with money on gox find out they're getting zilch. This isn't like the early days when large bitcoin heists could be shrugged off and soon forgotten.

[blatchcorn]

Even if the coins are sold to private buyers off-exchange, the price is still going down. There's going to be a lot more supply than demand and the people buying gox's coins won't need to be buying any from exchanges for a long time. Not to mention the negativity in the media when people with money on gox find out they're getting zilch. This isn't like the early days when large bitcoin heists could be shrugged off and soon forgotten.

Bad publicity from Mt Gox has been priced-in since January 

Also, the price will only go down short-term. There will be no long-term downtrend from more supply, look at Dogecoin for example

[master-P]

Who would gox owe money to other than their customers and employees? Rent for their office and servers? Or maybe a big bank loan to fund a crappuccino addiction? Lawyers?

It just doesn't seem like their expenses were that big.

[joehal]

Yeah. And why should others come first, in front of the customers. How is this fair ? And if it's not fair, then are we talking about corruption ? In Japan ? Judge bribery and stuff ? Since there are so many clients, they will not get away that easy. Tons of people would gather there demanding answers and transparency.

 How would a judge just declare : Well, we know that we should have split the money equally, but in the end we thought about it and decided to give priority to these gentlemen with limousine and rolex watches.

And why shouldn't those expenses come from the Mark Karpeles fortune ? Because I imagine he is not poor. Why should those expenses come from the 5 bitcoins most of the users on mt gox has ?

[Wilhelm]

Who would gox owe money to other than their customers and employees? Rent for their office and servers? Or maybe a big bank loan to fund a crappuccino addiction? Lawyers?

It just doesn't seem like their expenses were that big.

Employee income. I don't think Mark was making minimum wage....

[joehal]

Who would gox owe money to other than their customers and employees? Rent for their office and servers? Or maybe a big bank loan to fund a crappuccino addiction? Lawyers?

It just doesn't seem like their expenses were that big.

Employee income. I don't think Mark was making minimum wage....

Really ? So a judge will declare : Yeah, we could take money from Mark, since he is guilty and all, but instead we will take from the 5 btc most of the users have on mt gox. We will leave poor Mark alone. And everyone will be ok with this, and nobody will accuse the judge of corruption.

[Wilhelm]

Who would gox owe money to other than their customers and employees? Rent for their office and servers? Or maybe a big bank loan to fund a crappuccino addiction? Lawyers?

It just doesn't seem like their expenses were that big.

Employee income. I don't think Mark was making minimum wage....

Really ? So a judge will declare : Yeah, we could take money from Mark, since he is guilty and all, but instead we will take from the 5 btc most of the users have on mt gox. We will leave poor Mark alone. And everyone will be ok with this, and nobody will accuse the judge of corruption.

I was reacting to your "It just doesn't seem like their expenses were that big." comment where "were" implies the past.

It could well be that MtGox was paying employees very good wages and after the coins were lost their millions of profit evaporated leaving a very negative balance.
Since wages are already paid you can't really get the money back.

Anyway I don't actually give a crap since I had 0 BTC in Gox. Do hope that Mark gets locked up for this.

[Jr65]

Unfortunately, fairness and bankruptcy, in both Tokyo and Texas, do not always mix. Once assets are liquidated, splitting up the insufficient funds is a complex process filled with legalities. It gets even more complicated when you have two cases filed in two distant countries that converse in two different languages. Now complicate matters even more due to criminal fraud of massive proportion. Okay, now add dozens of soon-to-come lawsuits all over the globe by angry, spiteful Mt. Gox. customers. Mt. Gox owes a fortune to regular creditors and God knows what to their former employees who all stand in front of any customers in BK Court. Customers will be lucky to get pennies on the dollar and "The Associated Press" says they will likely get nothing. I noted, earlier in this thread, that someone said that the Mt. Gox uncertainty is already factored into the price. That is ridiculously wrong. You can factor in certainties but not wild completely unpredictable uncertainties. Based on the relatively small amount of money flowing through BTC and the space's paper thin infrastructure, you cannot tell me that $500 per coin is a price that reflects any possibility that idiot bankruptcy liquidators, coordinating between Tokyo and Texas, might auction off 200k plus coins for 20 cents on the dollar. While these Courts may take a long time to sort things out, they sell assets as fast as they can to as few people or entities as possible in order to preserve self-payment. Even at steeply discounted prices, we are talking about many many millions of dollars that no one in this community has or would be willing to part with for such a risky proposition. No one here can deny that, if 200k plus coins go on an auction block in Tokyo and or Dallas, prices will not plummet. I can only imagine that I'm going to get blasted for this post. Go ahead but when you blast away, tell me why I'm wrong about this! (I hope I am!) This is simply law and economics at work. Mt. Gox's last breath is going to bring BTC to its knees.           

[pinksheep]

how much do you think the price will plunge? & how soon?

[joehal]

Unfortunately, fairness and bankruptcy, in both Tokyo and Texas, do not always mix.

 Okay, now add dozens of soon-to-come lawsuits all over the globe by angry, spiteful Mt. Gox. customers. Mt. Gox owes a fortune to regular creditors and God knows what to their former employees who all stand in front of any customers in BK Court. Customers will be lucky to get pennies on the dollar and "The Associated Press" says they will likely get nothing.          

First the bankruptcy should split the money to the customers and after that, can commence dozens of lawsuits, of course all directed to Mark Karpeles. Because it would be ridiculous otherwise. Imagine a single customer to come up with a lawsuit and to claim that because he is more important and has money for a lawyer, the rest of smaller clients should give up their half to make whole that one single client. So all the lawsuits that will follow should have nothing to do with the money MT GOX has right now which should be split equally to clients.

I'm not saying "The Associated Press" is not right, but I would really like to know and hear an explanation why a few more important people should get the money first and then the peons. Just because that is the case in movies ? Where big shots with lawyers, grease judges and everyone is dirty ? That is the reason ? Or what ?

I will be really curious to hear that judge argument and how he will justify that is normal for all the clients to get just pennies from the 200k bitcoins and then some more millions dollars or how much mt gox assets are valued.

[Jr65]

Bankruptcy Courts have rules and so do Government and State-sponsored liquidations. I am a lawyer but I don't specialize in Bankruptcy. I do, however, know some about the process. Usually, there is a specific order in which people are paid. Because there is never enough money to pay everyone, the entire class of 'people owed' agree to (or try to agree to!) take huge cuts on their balances. They really don't have a choice. This process is not always fair. Employee claims usually carry what is called "super priority" which means that, after the Court is paid, they are paid in their agreed to lower amounts. Then the creditors are addressed and finally, in this case, the customers will get their share if there is anything left. Likely nothing. I totally understand the "should, should, should" argument but that is not the way it works. Bankruptcy/Corporate Liquidation has been around a long time and no one is going to change the rules for BTC just because things do not appear fair or because there is fraud involved. I have never seen a fair Bankruptcy. Someone always gets screwed by its very nature. (Can't pay the bills!) As far as the question of when is this going to happen, I haven't the foggiest idea. We will have to monitor the news for updates. I expect mass chaos behind the scenes as Tokyo and Texas attempt to coordinate rulings. My guess is that this will take a few years to its final completion. That does not mean that coin liquidation could not happen sooner. Since Courts do not like to front costs, my sense if that liquidation will be as early in the Bankruptcy process as possible. In other words, totally unpredictable. We just have to wait and see or sell and wait. Caveat emptor!  

[kooke]

Based on the relatively small amount of money flowing through BTC and the space's paper thin infrastructure, you cannot tell me that $500 per coin is a price that reflects any possibility that idiot bankruptcy liquidators, coordinating between Tokyo and Texas, might auction off 200k plus coins for 20 cents on the dollar. While these Courts may take a long time to sort things out, they sell assets as fast as they can to as few people or entities as possible in order to preserve self-payment. Even at steeply discounted prices, we are talking about many many millions of dollars that no one in this community has or would be willing to part with for such a risky proposition. No one here can deny that, if 200k plus coins go on an auction block in Tokyo and or Dallas, prices will not plummet. I can only imagine that I'm going to get blasted for this post. Go ahead but when you blast away, tell me why I'm wrong about this! (I hope I am!) This is simply law and economics at work. Mt. Gox's last breath is going to bring BTC to its knees.           

Most people here will try to shoot an analysis like this down, but I think the gox proceedings will unfold in a manner quite like what you have described.

[Peter R]

Based on the relatively small amount of money flowing through BTC and the space's paper thin infrastructure, you cannot tell me that $500 per coin is a price that reflects any possibility that idiot bankruptcy liquidators, coordinating between Tokyo and Texas, might auction off 200k plus coins for 20 cents on the dollar. While these Courts may take a long time to sort things out, they sell assets as fast as they can to as few people or entities as possible in order to preserve self-payment. Even at steeply discounted prices, we are talking about many many millions of dollars that no one in this community has or would be willing to part with for such a risky proposition. No one here can deny that, if 200k plus coins go on an auction block in Tokyo and or Dallas, prices will not plummet. I can only imagine that I'm going to get blasted for this post. Go ahead but when you blast away, tell me why I'm wrong about this! (I hope I am!) This is simply law and economics at work. Mt. Gox's last breath is going to bring BTC to its knees.           

Most people here will try to shoot an analysis like this down, but I think the gox proceedings will unfold in a manner quite like what you have described.

What do you guys think about this:

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors).  These are the same people who just lost 750k BTC.  Would you expect some of these people to re-purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol] thereby increasing demand? 

To me, the direction of the anticipated price movement is not clear.

[eoJ]

Wtf is that? They tested nukes on dinosaurs? How is that even possible, isnt there like.. a 500 year time-span difference!?  

Little known fact, Jesus was actually eaten by a wandering T-rex.

[bryant.coleman]

What do you guys think about this:

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors).  These are the same people who just lost 750k BTC.  Would you expect some of these people to re-purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol] thereby increasing demand? 

To me, the direction of the anticipated price movement is not clear.

From what I have heard. Mt Gox had outstanding debts (most of it to the Japanese banks) to the tune of $60 million. Any proceeds from the auction of the BTC200,000 will be first used to pay-off that debt. Only the remaining portion will be used to compensate the users who lost their coins.

[Peter R]

What do you guys think about this:

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors).  These are the same people who just lost 750k BTC.  Would you expect some of these people to re-purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol] thereby increasing demand? 

To me, the direction of the anticipated price movement is not clear.

From what I have heard. Mt Gox had outstanding debts (most of it to the Japanese banks) to the tune of $60 million. Any proceeds from the auction of the BTC200,000 will be first used to pay-off that debt. Only the remaining portion will be used to compensate the users who lost their coins.

I think you need to check your facts.  Their 6.5 billion yen in liabilities are primarily from the fiat balances of their depositors; these liabilities are offset by their 3.8 billion yen in assets.

On February 28, 2014, Mt Gox filed for bankruptcy protection in Tokyo, reporting 6.5 billion yen in liabilities, 3.8 billion yen in assets, and 750,000 of customer bitcoins missing.  

^ they're actually 200 kBTC richer now too. 

[dreamspark]

What do you guys think about this:

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors).  These are the same people who just lost 750k BTC.  Would you expect some of these people to re-purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol] thereby increasing demand? 

To me, the direction of the anticipated price movement is not clear.

While I agree there will be some who use some of the fiat to purchase coins I would think that a lot of people burned by gox simply want nothing to do with BTC and will be happy with any amount received to soften the blow. Its all so complicated and hard to speculate on but given the fact that the liquidators will likely settle for way less than market price means that the customers aren't likely to get too much back after every things said and done and again likely not for few years