Who is behind the flash crash? (Part II)

[nelruk]

Again, a hugh order in Bitstamp take all of us to answer some questions and it's not about the BTC itself but the way people and institutions are taking advantages from the exchanges. First at all, I don't understand how it is possible people to freak out for some order that obviously are just smoke granade. They made a perfect scene because as far as I can see, there was some people who was selling behind the price.

In other forums, people are begin to talk (again) about several groups that is manipulating Bitcoin. I know that manipulating is very hard to do and besides the large amounts of commerces accepting BTC make the price go down becuase there is everytime less speculation.

How can you explain this fall?

[freedombit]

This is just an idea, and not one I put much credence in, but worth mentioning as a possibility.

Looks like there was about 5 million Bitcoin that exchanged hands around the time Silk Road went down, and the Dept of Homeland Security seized MtGox's Dwolla account. The exchange rate in USD was around $120, so roughly $600 million USD exchanged hands. $600 million USD is a smitten of an investment for an entity that might be holding $100+ Billion in USD. There are many entities that could fall into this category: a bank, a government, or a large corporation. Heck, even a single man, like Bill Gates, has the capacity to drop $600 million pretty easily to protect the other $40 Billion. (For the record, I don't think Bill Gates would do this. However, a hedge fund that he knowingly or unknowingly has a stake in might.)

It looks like we are seeing prices drop on volumes below 100k Bitcoin per week for the last few weeks.

IF there was a large buyer of Bitcoin in May 2013, now trying to wear out the Bitcoin community, at this rate it will take somewhere between 1 to 1.5 years to burn through those 5 million Bitcoin.

This is just a cursory idea on a quick view of market stats - only looking at a couple key markets (MtGox, BitStamp). Any technicians out there have an opinion on this? I am sure the thought is fairly easy to credit or discredit.

[DieJohnny]

This is just an idea, and not one I put much credence in, but worth mentioning as a possibility.

Looks like there was about 5 million Bitcoin that exchanged hands around the time Silk Road went down, and the Dept of Homeland Security seized MtGox's Dwolla account. The exchange rate in USD was around $120, so roughly $600 million USD exchanged hands. $600 million USD is a smitten of an investment for an entity that might be holding $100+ Billion in USD. There are many entities that could fall into this category: a bank, a government, or a large corporation. Heck, even a single man, like Bill Gates, has the capacity to drop $600 million pretty easily to protect the other $40 Billion. (For the record, I don't think Bill Gates would do this. However, a hedge fund that he knowingly or unknowingly has a stake in might.)

It looks like we are seeing prices drop on volumes below 100k Bitcoin per week for the last few weeks.

IF there was a large buyer of Bitcoin in May 2013, now trying to wear out the Bitcoin community, at this rate it will take somewhere between 1 to 1.5 years to burn through those 5 million Bitcoin.

This is just a cursory idea on a quick view of market stats - only looking at a couple key markets (MtGox, BitStamp). Any technicians out there have an opinion on this? I am sure the thought is fairly easy to credit or discredit.

Maybe not the govt, or Gates, but there is no doubt this is exactly what is happening. Endless selling by a huge holder that is in the black at almost any price. Selling, selling, selling, zero care about current market. Could be cold manipulation, could be criminal organization that just needs operating fiat, could be someone playing God, but I think we are in for two years of this crap minimum. Simply too few big dollar holders that can play God with their million BTC.

[Mieehayii]

Random thoughts on flash crashes
http://www.reddit.com/r/BitcoinMarkets/comments/2jrabu/random_thoughts_on_flash_crashes/

[ivanovasmd]

It's too volatile, and there is no mechanism to mediate that volatility. Anyone remembers that ridiculous 30K wall?
If that guy had liquidated with a market order, he could have brought the price to almost zero on Bitstamp. Other exchanges would have likely followed suit - though bots and zealous traders would have mediated the effects.

[Sunderland]

Its not someone or some group but something behind this crash.
Just look world economy now , gold down , oil down etc.

[labsbitforum]

A lot of people attribute these spikes as intentional market manipulations.  Couldn't they just be some of the 650,000 MtGox coins that were stolen?

[bigtimespaghetti]

A lot of people attribute these spikes as intentional market manipulations.  Couldn't they just be some of the 650,000 MtGox coins that were stolen?

Or a thinly traded asset? Which bitcoin is in comparison to global markets.

[bassclef]

A lot of people attribute these spikes as intentional market manipulations.  Couldn't they just be some of the 650,000 MtGox coins that were stolen?

Most of their "cold storage" addresses are known, why not check yourself? Nobody even knows how many coins were stolen, if any. That was just the excuse Karpeles gave.

[labsbitforum]

A lot of people attribute these spikes as intentional market manipulations.  Couldn't they just be some of the 650,000 MtGox coins that were stolen?

Most of their "cold storage" addresses are known, why not check yourself? Nobody even knows how many coins were stolen, if any. That was just the excuse Karpeles gave.

Some have argued that they were never stolen and Karpeles is hiding them.  My belief is they were stolen.  The last official number was 650,000.  (850,000 MIA minus the 200,000 they found after closing down Mtgox)

[dropt]

Some have argued that they were never stolen and Karpeles is hiding them.  My belief is they were stolen.  The last official number was 650,000.  (850,000 MIA minus the 200,000 they found after closing down Mtgox)

And if they were stolen, when were they stolen?  I would think some time in 2011, if at all.

[labsbitforum]

Some have argued that they were never stolen and Karpeles is hiding them.  My belief is they were stolen.  The last official number was 650,000.  (850,000 MIA minus the 200,000 they found after closing down Mtgox)

And if they were stolen, when were they stolen?  I would think some time in 2011, if at all.

I was fortunate enough to move out of Mtgox prior to the collapse.  If you interacted with Mtgox in the 2 or 3 months prior to the end it was clear things were not ok there.  My opinion is they were stolen much earlier as well.  I think willybot was an attempt to recoup the loss.  I think we would have had a bubble anyway and willybot was a catalyst that pushed it much higher/faster.  The bubble and collapse of Mtgox seriously damaged bitcoin in my opinion.  As has the centralization of mining...