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Question: Do you think Willy and Markus (MtGox bots) were behind the last two BTC bubbles?
Yes, they were the primary reason for both April and December bubbles
Yes, they were the primary reason for the April bubble
Yes, they were the primary reason for the December bubble
Yes, but at this point it doesn't matter anymore, the bubbles brought new money and adoption to support the current price
No, they probably contributed but price would have gone up almost the same without them
No, the bots were just an API for high value clients (the buys were legit)
No, there's not enough evidence to support the claims and assumptions made in the Willy Report

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Author Topic: Do you think Willy and Markus (MtGox bots) were behind the last two BTC bubbles?  (Read 5875 times)
Wandererfromthenorth
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September 30, 2014, 12:08:20 PM
 #1

You are probably familiar with the notorious WillyReport:

http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/


"Somewhere in December 2013, a number of traders including myself began noticing suspicious bot behavior on Mt. Gox. Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January."


Whether the work of hackers (who in that case stole all the MtGox bitcoin and were the real reason for Gox bankruptcy) or a conspiracy by Karpeles, The two bots (Especially Willy) accounted for quite some buying power during the bubbles.

Some have suggested that the bots were not a hack nor a conspiracy, but simply "a bot/API for high value clients":
http://www.reddit.com/r/Bitcoin/comments/26is61/the_simplest_explanation_is_usually_the_right_one/
In that case, the underlying implications of the Willy Report (some of the buys were made with "infinite fake fiat") would be false.


With the constant current downtrend in BTC price that we are all witnessing BTC users are trying to find an answer to what's happening.
So, do you think Willy and Markus "fake infinite fiat" was behind the last two BTC bubbles, or you think the explanation for the current downtrend has nothing to do with this?
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AtheistAKASaneBrain
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September 30, 2014, 12:34:00 PM
 #2

I think they would have played a big role in the bubbles, but the real trigger was real interest in Bitcoin, beyond any manipulations therein. The current downtrend is simply the common folk not seeing a reason to own any BTC, they don't see in what ways BTC would improve their lifes as of right now unless they think the price will go REALLY high in the future (at this point the commmon folk cant invest a lot of FIAT into this beyond say 1 BTC). And they aren't going to risk their salary into hoping a coin goes to 2K in the next years, they would rathe spend it on a holidays and whatnot. We need to show a real reason to own BTC for the common folk and make it easy as hell to obtain then. They are put off by exchange verifications and so on.


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September 30, 2014, 01:27:28 PM
 #3

The bubble was almost certainly the sole work of the MtGox bots.  They didn't create the entire bubble, they just drove it.  That in turn sucked more speculators in as they bought with the belief of doubling their money within a few weeks.  If you're running the largest bitcoin exchange and no one is checking your books, you're pretty much free to do whatever you want.  Karpeles got caught running a fractional reserve exchange and couldn't stop despite having the higher price per bitcoin for months.  People smelled something bad and wanted out, trouble is MtGox suddenly had mysterious trouble paying out.  How odd.

Since the demise of MtGox there have been small attempts to reinflate the bubble but nothing has really worked.  I'm frankly surprised we're not sitting much lower than $375 right now.

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September 30, 2014, 01:39:05 PM
 #4

Bears with financial gain if price drops (OP): of course, Willy caused all of bitcoin gains!!!


Everyone else: has willy been proven? Wasn't gox like 10% of global volume in the last runup with China then as now leading?

Perhaps disclose you are short before posting fud?
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September 30, 2014, 02:07:17 PM
 #5

Bears with financial gain if price drops (OP): of course, Willy caused all of bitcoin gains!!!


Everyone else: has willy been proven? Wasn't gox like 10% of global volume in the last runup with China then as now leading?

Perhaps disclose you are short before posting fud?

Maybe not all of them, but if you look at older screenshots of the Gox market you can see clear patterns where something was jumping prices back up every time there was a dip. It looks like a heartbeat.
Wandererfromthenorth
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September 30, 2014, 02:51:52 PM
 #6

Perhaps disclose you are short before posting fud?
Are you talking about me? I just posted the poll trying to be as neutral as possible and to let people discuss about what I think is an important topic.
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September 30, 2014, 03:00:56 PM
 #7

They were a contributing factor. I was not around for the jump to $32 but the explanation for that one was that all of the Bitcoiners believed the Bitcoin would be huge and when the price started going up they thought "this is it" and drove the price up with wild enthusiasm.

We have had a few of those moments.

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September 30, 2014, 03:21:21 PM
 #8

Perhaps disclose you are short before posting fud?
Are you talking about me? I just posted the poll trying to be as neutral as possible and to let people discuss about what I think is an important topic.

Fair enough. I read your post very quickly, on re-reading it is actually balanced. My apologies!
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September 30, 2014, 06:31:29 PM
 #9

Perhaps disclose you are short before posting fud?
Are you talking about me? I just posted the poll trying to be as neutral as possible and to let people discuss about what I think is an important topic.
you forgot though to post an option of "no, the willy bot rumors are illogical and unsubstantiated", all your options imply that it is a fact that these bots drove the rally, or even existed in the first place, which is still up for debate.
Wandererfromthenorth
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September 30, 2014, 06:53:21 PM
 #10

Perhaps disclose you are short before posting fud?
Are you talking about me? I just posted the poll trying to be as neutral as possible and to let people discuss about what I think is an important topic.
you forgot though to post an option of "no, the willy bot rumors are illogical and unsubstantiated", all your options imply that it is a fact that these bots drove the rally, or even existed in the first place, which is still up for debate.
All the options imply that they existed not that they drove the rally. Option 5 implies they existed but didn't change much.



The Willy and Markus trades were clearly visible on the leaked Gox Data.
Are you saying you don't believe that leaked data was in fact from Mtgox?
Or simply that the author of the Willy Report makes too many assumptions?

PS: I added your option in the poll.
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September 30, 2014, 07:01:49 PM
 #11

MtGox was 10-20% above the other exchanges for a very long time.

People at other exchanges looked at how non-existing BTC was bought with non-existing USD at emptygox at higher and higher prices and bought the other exchanges as a result.

There was also a handful of people allowed to do "arbitrage" (which really wasn't) and they market bought the other exchanges without a second thought since those select few could immediately sell at an immense profit at MtGox - which was great for them until that "profit" vaporized along with their initial investment.

MtGox bots were definitively a big factor. They were certainly not the only one (China was and still is the most important factor) but they did have a big impact.

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September 30, 2014, 08:17:37 PM
 #12

x Missing option:
The bots acted as a catalyst, increasing the bubble well beyound reasonable size. Likely BTC were bought with none existing fiat.

Personal conclusions (ymmv):
The $/BTC price would have never reached the "real" levels. Ranges of 200-300 $/BTC would have been more likely.
The resulting blow to the BTC ecosystem will have long reaching consequences (MTGox wasnt the first, but the biggest) resulting in lost invester confidence.
The resulting spike resulted in to much enthusiasm. This caused unreasonable expenses in directly attached "industries". Especially mining companies will go broke. The attached "stink of fail" will linger for a long time.

Personal opinion:
The bots were very bad for BTC, while the short term price increase looked nice the consquences are detrimental.
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September 30, 2014, 10:03:16 PM
 #13

x Missing option:
The bots acted as a catalyst, increasing the bubble well beyound reasonable size. Likely BTC were bought with none existing fiat.

Personal conclusions (ymmv):
The $/BTC price would have never reached the "real" levels. Ranges of 200-300 $/BTC would have been more likely.
The resulting blow to the BTC ecosystem will have long reaching consequences (MTGox wasnt the first, but the biggest) resulting in lost invester confidence.
The resulting spike resulted in to much enthusiasm. This caused unreasonable expenses in directly attached "industries". Especially mining companies will go broke. The attached "stink of fail" will linger for a long time.

Personal opinion:
The bots were very bad for BTC, while the short term price increase looked nice the consquences are detrimental.

Agree completely with your points.  Especially with the bots being a catalyst that took whatever bubble was happening and "teased" it up faster and higher than it would have gone on its own.  Lots of money was pouring in; from China especially.  The bots amplified it.
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September 30, 2014, 10:26:09 PM
 #14

Don't know if them, but I'm pretty sure the last bubble at least has linked to GOX in some sense and would not start without them.

That's why I doubt we will see another bubble any time soon

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October 01, 2014, 01:15:33 AM
 #15

So why did all the other exchanges rise?
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October 01, 2014, 01:42:07 AM
 #16

So why did all the other exchanges rise?

sheep following.

emotional panic

no active brain cells

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October 01, 2014, 03:43:41 AM
 #17

They were a factor but in the end it was China getting into the game. Lots of people getting into Bitcoin=price rise. And because Bitcoin is such a limited commodity it doesn't take millions of individuals to drive the price up exponentially. It doesn't seem like it now, but coins become pretty scarce on the exchanges when buy pressure becomes immense. This is the reason the price rockets up: Once traders believe there is a strong bull market, they take their coins off the books to sell at a higher price.

Then they banned it, the price dropped, they unbanned it, the price went up, banned again, price down, etc until all the original Chinese speculators were out of the market.

It's an easier explanation to believe than a bot, or group of bots, could supply that much buying pressure.
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October 01, 2014, 05:09:19 AM
 #18

I think the current price drop also contributed by someone unknown
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October 01, 2014, 05:16:29 AM
 #19

So why did all the other exchanges rise?

sheep following.

emotional panic

no active brain cells

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October 01, 2014, 08:44:40 AM
 #20

https://bitcointalk.org/index.php?topic=21456.msg269034#msg269034

MTGOX and Satoshi seems to be up to no good.
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