Gold collapsing. Bitcoin UP.

[Melbustus]

part of my problem with your theory, Peter, is that i was a buyer during the time from June to Nov.  i was in contact with Mark over IRC several times and i never got the feeling he was under pressure.  once, i had a problem withdrawing a chunk of coin and he had to write a script to get my coin out.  he shredded another chunk doing so but didn't pass that on to me.  and he shrugged it off as in no big deal. that single act made me a fan thereafter.  naively it turns out.  but then there was also the Bitomat.pl bailout of 17000 BTC he donated to losers on that exchange.  along with numerous other philanthropic acts over the ensuing years. 

I think he was just a careless and generally unconcerned guy. Never met him or interacted with him, but all his interviews, comments, and code seem that way to me.

[1713553921]

1713553921

[1713553921]

1713553921

[marcus_of_augustus]

btw, the current pullback was a result of Gox also.  it's a good thing they're out of biz:

Gox has shutdown at all three major peaks ... we haven't had a blow-off top yet without a technical failure of the main centralised price discovery mechanism that initiates it.

[smooth]

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.

part of Peter's theory, though, is that 1M coins were sold driving the price down to $10.

Do you mean down to $2? In that case, even if true, the thief wouldn't necessarily have had to sell them all, only "enough" to drive the price down to $2 and extract whatever USD profit he wanted at the time. He could easily have held the rest of the coins, and perhaps could even be selling them now (100% speculation on that last of course).

[cypherdoc]

yeah, while totaling those volume bars during few days is difficult, i don't see evidence of 1M BTC traded during that time.

If it was stolen, there is no reason to think it would have traded quickly. It probably would have moved on the blockchain, although if the thief had some reason to believe he got the only copy of the private keys (some sort of inside-ish job most likely), he might not even do that right away.

part of Peter's theory, though, is that 1M coins were sold driving the price down to $10.

Do you mean down to $2? In that case, even if true, the thief wouldn't necessarily have had to sell them all, only "enough" to drive the price down to $2 and extract whatever USD profit he wanted at the time. He could easily have held the rest of the coins, and perhaps could even be selling them now (100% speculation on that last of course).

i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.

[Peter R]

i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.

I meant that a bunch of coins had recently been deposited at MtGox...they weren't necessarily traded.  I'm just trying to concoct a reasonable explanation for why the coins weren't in cold storage (my explanation is that Mark was disorganized and extremely busy during the May/June run up, and a bunch of coins flooded into Gox during this time and left sitting on his server).  Of course, this assumes the theft even took place--something that may not be true.  

[smooth]

i'm just going by his Reddit write up which posits a 1M BTC selloff taking the price from 32 to 10.  as i said, i don't see those volume bars adding up to that #BTC trades during those few days.

I meant that a bunch of coins had recently been deposited at MtGox...they weren't necessarily traded.  I'm just trying to concoct a reasonable explanation for why the coins weren't in cold storage (my explanation is that Mark was disorganized and extremely busy during the May/June run up, and a bunch of coins flooded into Gox during this time and left sitting on his server).  Of course, this assumes the theft even took place--something that may not be true.  

A huge number of coins probably did flood in, that is entirely plausible. The rise was very fast and to a level that was orders of magnitude higher than cost for most Bitcoin holders at the time. Whether it was 1M and how many of them would have been sold I have no idea.

[Erdogan]

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

not sure what you're referring to.  you mean the guy Kevin who stole around 2000BTC?

Although the evidence is circumstantial, a plausible case can be made that the great bitcoin theft actually took place in 2011, and all the following events were the result of Mark trying to fix it:

http://www.reddit.com/r/Bitcoin/comments/1zdnop/peter_rs_theory_on_the_collapse_of_mt_gox/

Good theory, I like it.

This means that the parameters for the exponential value curve (the rising part of the s-curve) are lower than what can be deduced from the complete history up till now. We have to regard price levels from 2012 up till now as erroneous. I am too lazy to draw a new curve, maybe someone else can do it.

[oda.krell]

Can anyone speculate as to what has been up with all the dumping?  Where are all these coins coming from?

My first guess would be that is the BTC that Karpeles stole.

I think the missing Gox BTC took us to $2 in 2011-12, this is the start of capitulation and whale re-balancing.

i sincerely hope that most whales are rebalancing as it would be the most bullish thing yet --> distribution into stronger, more numerous hands.

More numerous: yes (at least I hope so).

Not "stronger" hands, though, that's a naive classification and you should know better than to use it. The key point is: distribution into hands that don't have experienced major returns on their investment yet and are therefore not tempted to lock in a guaranteed profit vs. a potential higher profit.

We don't argue with peoples' risk preferences, otherwise we don't need a market.

[N12]

Who says more numerous hands either? If prices are allowed to decline, then that is because of less numerous hands typically. Strong hands are few, they take the liquidity from the market and allow it to surge without resistance. The distribution happens in the bubble phase and the subsequent bull trap.

Accumulation = Many Small => Few Big Players
Distribution = Few Big => Many Small players

[blaaaaacksuit]

Welp...RIP BTC.  Nice knowin yall! Page 666 - very fitting.

[Adrian-x]

Who says more numerous hands either? If prices are allowed to decline, then that is because of less numerous hands typically. Strong hands are few, they take the liquidity from the market and allow it to surge without resistance. The distribution happens in the bubble phase and the subsequent bull trap.

Accumulation = Many Small => Few Big Players
Distribution = Few Big => Many Small players

I'm not sure of the split, but you have a point, personally I started accumulating (a new hand) during the bear market of 2011.
And oda.krell point is valid too, It fits with my experience as I sold the vast majority of my stash at a profit befor the April growth spurt. (I didn't see the potential 1000% growth I was exposed too) but locked in profit for safety.

The bottom line is there are lots of investment strategies and there is growth potential on the up and down.

[Melbustus]

Who says more numerous hands either? If prices are allowed to decline, then that is because of less numerous hands typically. Strong hands are few, they take the liquidity from the market and allow it to surge without resistance. The distribution happens in the bubble phase and the subsequent bull trap.

Accumulation = Many Small => Few Big Players
Distribution = Few Big => Many Small players

I'm not sure of the split, but you have a point, personally I started accumulating (a new hand) during the bear market of 2011.
And oda.krell point is valid too, It fits with my experience as I sold the vast majority of my stash at a profit befor the April growth spurt. (I didn't see the potential 1000% growth I was exposed too) but locked in profit for safety.

The bottom line is there are lots of investment strategies and there is growth potential on the up and down.

Yeah, likewise - I discovered bitcoin shortly before the 2011 run-up, and intentionally sat back and watched it happen without buying. I was new to the whole thing, and wanted to see how it played out before buying (ie, how far the market took the price, what happened after a crash/correction, etc). When price rebounded and stabilized after the Gox hack, I considered that fundamental strength in the ecosystem and support by those involved, which gave me the confidence to jump in a little.

As I subsequently learned more and more about bitcoin (and studied money in general) in the 2nd half of 2011, I was happy to keep making small purchases as the price continued to drop, since my education, and therefore confidence level in bitcoin as a tech/concept/money/asset just kept rising.

I imagine that once we find a bottom and stabilize, we'll see newcomers with similar approaches take positions for the first time. I don't think the more prudent/thoughtful investors (who probably have the most wealth in general) trip over the themselves to jump in during *either* a rapidly rising or rapidly falling market.

[Peter R]

Good day my friends.  The problem with this crash is that it still hasn't shaken my optimism.  Perhaps that means we're going lower. 

Riffing on what Adrian and Melbustus said, my entry into bitcoin was similar although one growth-spurt later.  I bought my first coin at $49 in March 2013 after reading Satoshi's white paper and realizing the brilliance of this innovation.  I have a mathematical/science background, but had been an armchair economist and hard-money enthusiast for years, so the combination of math, technology, and a new better form of money was highly appealing to me.  For two weeks I didn't do any work, instead reading everything I could on bitcoin. 

I did the calculation that probably many of you did, projecting the potential market-cap of bitcoin, and concluded that its value was mid 4-figures simply as a hedge that it might succeed.  I couldn't build a position fast enough as the price climbed in late March and early April, I still didn't know if I was securing my coins properly, and I half-suspected cavirtex to be a scam (which it's clearly not).  I felt that I must have discovered this great new thing at the same time as the entire world.

The crash of April 2013 turned out to be a very good thing in hindsight.  I continued to build a position over the summer--fairly disinterested in the price and only paying peripheral attention to this forum.  I probably only checked the price every second day at that point in time.  During the dip in July back to $60, I began to think that bitcoin might fade away but I continued to dollar-cost average in anyways.  It was the recovery from the July dip, and the strength through August and September that really made me confident. It's hard to explain it, but something changed inside my head and I knew that bitcoin was legitimate.  I actually made my largest purchases at a price significantly higher than the July 2013 low, six months after my first bitcoin purchase.

So, I suspect there's a new cohort of people very similar to me who've discovered bitcoin during the November 2013 growth spurt.  They're most certainly underwater (like I was), but I also suspect they hold less coins than they'd prefer and are are probably tepidly purchasing right now, uncertain about what the future holds.  Should we stabilize and rebound higher, and stay there for a while, the confidence of many new users will be rebuilt (who might also be at a small gain at that time).  If another growth spurt emerges, I think it will be catalyzed by additional purchases from this cohort of users who actually learned about bitcoin during the November media blitz.     

[Melbustus]

Good day my friends.  The problem with this crash is that it still hasn't shaken my optimism.  Perhaps that means we're going lower. 

Riffing on what Adrian and Melbustus said, my entry into bitcoin was similar although one growth-spurt later.  I bought my first coin at $49 in March 2013 after reading Satoshi's white paper and realizing the brilliance of this innovation.  I have a mathematical/science background, but had been an armchair economist and hard-money enthusiast for years, so the combination of math, technology, and a new better form of money was highly appealing to me.  For two weeks I didn't do any work, instead reading everything I could on bitcoin. 

I did the calculation that probably many of you did, projecting the potential market-cap of bitcoin, and concluded that its value was mid 4-figures simply as a hedge that it might succeed.  I couldn't build a position fast enough as the price climbed in late March and early April, I still didn't know if I was securing my coins properly, and I half-suspected cavirtex to be a scam (which it's clearly not).  I felt that I must have discovered this great new thing at the same time as the entire world.

The crash of April 2013 turned out to be a very good thing in hindsight.  I continued to build a position over the summer--fairly disinterested in the price and only paying peripheral attention to this forum.  I probably only checked the price every second day at that point in time.  During the dip in July back to $60, I began to think that bitcoin might fade away but I continued to dollar-cost average in anyways.  It was the recovery from the July dip, and the strength through August and September that really made me confident. It's hard to explain it, but something changed inside my head and I knew that bitcoin was legitimate.  I actually made my largest purchases at a price significantly higher than the July 2013 low, six months after my first bitcoin purchase.

So, I suspect there's a new cohort of people very similar to me who've discovered bitcoin during the November 2013 growth spurt.  They're most certainly underwater (like I was), but I also suspect they hold less coins than they'd prefer and are are probably tepidly purchasing right now, uncertain about what the future holds.  Should we stabilize and rebound higher, and stay there for a while, the confidence of many new users will be rebuilt (who might also be at a small gain at that time).  If another growth spurt emerges, I think it will be catalyzed by additional purchases from this cohort of users who actually learned about bitcoin during the November media blitz.     

Indeed. I suppose it makes sense that people need to *experience* a crash, stabilization, and subsequent re-escalation in order to be convinced of permanence/resilience. For most people, it's one thing to look at charts from years past and intellectually acknowledge it, and entirely another to experience it.

Right now we have a lot of people who think bitcoin might go away, despite the past evidence that these sorts of drops are status-quo for this asset-class. When it doesn't go away, they'll take another, far deeper look.

[NotLambchop]

[BlindMayorBitcorn]

Deleting posts. So evil

[ssmc2]

Who deleted it?

[BlindMayorBitcorn]

Maybe the moderator is a Mormon. My apologies I'm sure. Peace be unto you brother

[cypherdoc]

Yawn

[NotLambchop]

^
Sorta.  Had a few luls.  Your thread topic always gives me a giggle, but today...  Today was special.