Bitstamp now needs 18,000 bitcoins to get back to where they were

[Elwar]

Bitstamp says they had 10-15% of their bitcoins in their hotwallet.

So, for easy math let's say they have 180,000 bitcoins and the last I checked they had over $10 million in orders.

They didn't have any of their fiat stolen, but they only have ~162,000 bitcoins.

They can probably add $5 million worth of fiat from their corporate account or investors or whichever. They will then need to convert that $5 million to bitcoins to get back to equilibrium of 180,000 and $10 million.

So, how do you believe they will do that?

[TrollinU]

Market buy the whole thing in one go of course 
$10,000 here we come!!!!!! 

[Jammalan the Prophet]

They don't need those 18000.

This is the biggest mistake people make.
Those coins where deposited on bitstamp by users who either wish to use them trade or to sell and get the money.

It's highly unlikely that everybody who deposited those 18000 coins will ask for them next thing tomorrow.
I assume a lot of them will just sell their coins (credited to their accounts) and demand back the usd.
So for those bitstamp can simply pay in usd.

[celebreze32]

Bitstamp says they had 10-15% of their bitcoins in their hotwallet.

So, for easy math let's say they have 180,000 bitcoins and the last I checked they had over $10 million in orders.

They didn't have any of their fiat stolen, but they only have ~162,000 bitcoins.

They can probably add $5 million worth of fiat from their corporate account or investors or whichever. They will then need to convert that $5 million to bitcoins to get back to equilibrium of 180,000 and $10 million.

So, how do you believe they will do that?

Pantera Capital invested $10m in Bitstamp during 2013, which could cover double their $5m loss.

http://www.coindesk.com/paypal-bitstamp-chief-compliance-officer/

Bitstamp used to do business directly with Bitfinex.

This article says Bitfinex used to include the Bitstamp order book in their own order book for liquidity purposes. In other words, they were arbitraging between themselves and Bitstamp.

http://bitcoinvista.com/2014/06/12/the-bitcoin-trading-platform-bitfinex-is-distancing-themselves-from-bitstamp/

Bitstamp could probably do a deal directly with Bitfinex or other companies they have connections to.

[Elwar]

They don't need those 18000.

This is the biggest mistake people make.
Those coins where deposited on bitstamp by users who either wish to use them trade or to sell and get the money.

It's highly unlikely that everybody who deposited those 18000 coins will ask for them next thing tomorrow.
I assume a lot of them will just sell their coins (credited to their accounts) and demand back the usd.
So for those bitstamp can simply pay in usd.

Yes, I would not expect it to be instant. BitStamp would need to have a strategy to transition back to equilibrium but in the meantime they would have a fractional reserve thing going on.

So, what would be the best approach to return to equilibrium?

[ElectricMucus]

They should ask Mark Karpeles to reimburse them.

Srsly if you believe this "hack" story you deserve everything that's coming.

[mike81]

Yes, I would not expect it to be instant. BitStamp would need to have a strategy to transition back to equilibrium but in the meantime they would have a fractional reserve thing going on.

So, what would be the best approach to return to equilibrium?

I don't think they are unbalanced at this stage even. So only when everyone starts to withdraw their BTC and fiat there might be a slight problem. I don't see this happening. If they reopen quickly and restore customer confidence trading will continue and may even get back to normal levels. Business as usual.

[ravenjt]

So, what would be the best approach to return to equilibrium?

Presumably to pray that (or engineer that) the BTC price crashes, so it only has to pay out a small amount of new USD to customers transferring the BTC to USD then withdrawing.
This suggests that it should discourage withdrawals of BTC, and instead encourage withdrawals of USD.

[NotLambchop]

... They will then need to convert that $5 million to bitcoins to get back to equilibrium of 180,000 and $10 million.

So, how do you believe they will do that?

They believe in Bitcoin, why would they be holding USD?  Who does that?

[Elwar]

... They will then need to convert that $5 million to bitcoins to get back to equilibrium of 180,000 and $10 million.

So, how do you believe they will do that?

They believe in Bitcoin, why would they be holding USD?  Who does that?

This is another option. The owners ponying up their on Bitcoin stash to cover it.

Their investors paid them in fiat so I would imagine they have to keep most of their profits in fiat. And Bitcoin is not quite at the stage yet where large companies can hold them. They are stuck with old technology when it comes to multiple people having access to the accounts.

[NotLambchop]

... They will then need to convert that $5 million to bitcoins to get back to equilibrium of 180,000 and $10 million.

So, how do you believe they will do that?

They believe in Bitcoin, why would they be holding USD?  Who does that?

This is another option. The owners ponying up their on Bitcoin stash to cover it.

Their investors paid them in fiat so I would imagine they have to keep most of their profits in fiat.

You don't understand.  People invest $$$ so that money can be put to work, not to be held in a bank account.

And Bitcoin is not quite at the stage yet where large companies can hold them...

Absurd.  That's what VCs do--high-risk, high reward investments.  Pantera Capital is not some 1% pension fund.  From Pantera's site:  "Pantera Capital is a Bitcoin investment firm focused exclusively on Bitcoin, other digital currencies and companies in the space."

[exocytosis]

Bitstamp have been running a fractional reserve for years. This hack story is an obvious lie, copied from Karpeles. During the next weeks we'll learn about Stamp's insolvency. Then they'll declare bankruptcy, and all your precious coins and fiat will be lost.

And if the story was true: What's stopping the thieves from hacking them again, stealing even more?

[RoadTrain]

Bitstamp have been running a fractional reserve for years. This hack story is an obvious lie, copied from Karpeles. During the next weeks we'll learn about Stamp's insolvency. Then they'll declare bankruptcy, and all your precious coins and fiat will be lost.

You have no proof, don't ya?

And if the story was true: What's stopping the thieves from hacking them again, stealing even more?

Maybe closing the security hole that allowed them to be hacked?

[mike81]

Bitstamp have been running a fractional reserve for years. This hack story is an obvious lie, copied from Karpeles. During the next weeks we'll learn about Stamp's insolvency. Then they'll declare bankruptcy, and all your precious coins and fiat will be lost.

And if the story was true: What's stopping the thieves from hacking them again, stealing even more?

I would love to see where you get that information from. Bitstamp has been relatively open about their reserves for exactly this reason, consumer confidence.

And about the hacking again theory; if you own a boat that has a hole in it, you don't let it sink to the bottom, you plug the hole and move on. Finding and fixing the leak is exactly why they have suspended their systems.

[Mervyn_Pumpkinhead]

They should activate willybot 2.0 to make back the money lost.
Then some will profit from the coming fake rise and most, who don't understand the specifics of the game, will lose their money

[NotLambchop]

Bitstamp have been running a fractional reserve for years. This hack story is an obvious lie, copied from Karpeles. During the next weeks we'll learn about Stamp's insolvency. Then they'll declare bankruptcy, and all your precious coins and fiat will be lost.

And if the story was true: What's stopping the thieves from hacking them again, stealing even more?

I would love to see where you get that information from. Bitstamp has been relatively open about their reserves for exactly this reason, consumer confidence.

And about the hacking again theory; if you own a boat that has a hole in it, you don't let it sink to the bottom, you plug the hole and move on. Finding and fixing the leak is exactly why they have suspended their systems.

>relatively open
Stress on "relatively."  Compared to BTC-e--yes, compared to a real financial institution--not even close.

>if you own a boat that has a hole in it
Boats carrying valuable cargo have hulls divided into watertight compartments, which could be easily sealed off under full steam.  If the breach is truly catastrophic (Titanic), stopping in the middle of the ocean won't help--abandon ship.
Nice analogy tho, the parallels with interwebs security are hard to miss

[piramida]

They don't need those 18000.

This is the biggest mistake people make.
Those coins where deposited on bitstamp by users who either wish to use them trade or to sell and get the money.

It's highly unlikely that everybody who deposited those 18000 coins will ask for them next thing tomorrow.
I assume a lot of them will just sell their coins (credited to their accounts) and demand back the usd.
So for those bitstamp can simply pay in usd.

Yes, I would not expect it to be instant. BitStamp would need to have a strategy to transition back to equilibrium but in the meantime they would have a fractional reserve thing going on.

So, what would be the best approach to return to equilibrium?

Most probably, when they open, there will be a bank run and BTC is gonna be requested. Doubtful that all the 200k from their cold will be withdrawn, but it is theoretically possible, and then they will have to buy in a hurry, yes. Even if, in a case of reassuring resolution (i.e. they will state that everybody will be paid in full and they will remain fully solvent) that bank run will be very limited, they will still need to buy those coins somewhere -- because they definitely will be audited. As there are no more auctions and the sum is a little bit too large for an OTC market, probably one of chinese big three will have to help here.

[N12]

As there are no more auctions

What are you talking about? The US feds still have 90-100k BTC to sell. Plus, MtGox's 200k BTC may be liquidated.

Not that this has much to do with Bitstamp's current need. My guess is they already had a good chunk of BTC by the side themselves. I think Pantera holds Bitcoin as well, and they have the means and experience to acquire larger sums of BTC on the OTC market.

[phoenix1]

All they need to do, and probably all they can do is fix the hole and re-open. This will IMO not be an overnight fix, especially if police are involved and a full investigation is required. Not sure how you do this whilst operating the exchange, even if you have found and fixed the attack vector.
Meanwhile, some, fearing the worst, could lose patience and sell. Hell, Stamp might even make a profit on the whole thing (EDIT : not 'profit', but  lose less than reported by buying cheaper than price at time of theft ). All it takes is a margin cascade at BFX and bingo, Stamp has plenty of coins to buy. I am sure that is one of the calls that has been made. Not in a conspiracy way, but in a 'we would buy the coins from any forced sellers'.

Where did that 10k of bids disappear to from BFX? Yesterday I would have said we looked vulnerable to a short squeeze. Now I think the longs should be equally concerned. This could escalate very quickly, but at least we know there is probably an extra buyer down below.

Just a story, like all the rest of the speculation here, but another way they might acquire the coins and why IMO there is no pressure for them to do anything in a hurry. They could probably afford to wait for the next SR auction. Pretty sure we will see the USMS back again before we reach $500. Yup, would cost a bit more, but they can afford it and its better than disrupting the market more than they already have.
As has been said, if there was a run, they could likely borrow as many coins as they need from multiple sources.

One thing they will not be doing is panic buying. That's what people here do  

[600watt]

they could buy them from me, but my coins are stuck in slovenia.