
MtGox's Bitcoin price drops to $260 (others at $600+) - austenallred
https://www.mtgox.com/trade
======
mappum
This is pretty logical. MtGox halted BTC withdrawals because of the
transaction malleability issue (which, due to MtGox's poorly made software,
let people get their withdrawal payments more than once, leaving MtGox open to
get its wallet emptied).

So now many people are stuck with MtGoxBTC, which is simply a balance in
MtGox's database. MtGoxBTC is being traded for actual BTC (on exchanges like
[https://www.bitcoinbuilder.com/](https://www.bitcoinbuilder.com/)). It has a
lower value since people are unsure whether or not MtGox will fix their system
and let them take their money (IMO they probably will). Sellers are getting
out to avoid the risk, and buyers are getting discounted (but potentially
risky) BTC.

~~~
hackerboos
>they probably will

At this point it appears that MtGox could go either way.

~~~
ZachPruckowski
I'd be fairly impressed if they survived - they seemed like they were already
on the ropes in terms of solvency with it taking months to payout for BTC
after the US government froze their accounts or fined them or whatever in May.
I'm not really sure how many serious dick-punches like that a company can
take.

~~~
jedunnigan
Those funds were seized because of their relation to SR and other illicit
activity. As such I don't think that has an effect on Gox's solvency.[1]

[1][http://thegenesisblock.com/mt-gox-seizures-linked-silk-
road-...](http://thegenesisblock.com/mt-gox-seizures-linked-silk-road-fed-
testimonies)

~~~
atwebb
If they were running a ponzi type operation then any missing cash on hand
could greatly disrupt their payments depending on the withdrawls at the time.

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justizin
Trade with confidence on the world's largest bitcoin exchange!

~~~
smtddr
Someone should make:

[http://canyouwithdrawfrommtgox.com](http://canyouwithdrawfrommtgox.com)
....and just have a giant font "YES" or "NO".

~~~
benjamincburns
Well that didn't take long!

~~~
MysticFear
Love the DOGE donation address, already #2 in a lot of people's eyes.

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tectonic
So I guess the market estimates a 50% chance that they disappear with the
coins. 50% arbitrage upside if you can get money in and buy bitcoins at half
price, 50% loss chance if they vanish.

~~~
ninguem2
Something more sinister seems to be going on. Looking at the chart, it is
clear that someone (mtgox itself?) is trying very hard to keep it at or above
260.

[http://bitcoinwisdom.com/markets/mtgox/btcusd](http://bitcoinwisdom.com/markets/mtgox/btcusd)

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theatraine
Does this represent an arbitrage opportunity? (it appears not, since MtGox is
limiting transactions due to a bug in their implementation of the protocol.)
Also, I wonder if anyone has used bots to perform HFT using bitcoin in the
same manner that was used on traditional stock exchanges.

~~~
camus2
No because you can buy bitcoins but cant get them out of MtGox. At that
point,it's just gambling.

~~~
MartinCron
If you're confident that MtGox will eventually get their shit together and
that bitcoin will have at least that value when you can, then it's a gamble
worth taking.

It's not a gamble that I'm taking, but I understand the motivation of those
who would.

~~~
iamjustin
Greed is a powerful motivator, but I'm with you. If MtGox hasn't gotten their
shit together in the year since they started having problems, I don't see why
they would now.

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brandonhsiao
Dumb question I genuinely don't know the answer to: what's to stop me from
buying a hundred Bitcoins from MtGox for $26,000 and selling it elsewhere for
$60,000?

~~~
mediocregopher
It's not currently possible to withdraw your 26k worth of BTC from MtGox, and
for a long time now it is very difficult to withdraw USD as well. You could
buy 26k of MtGoxBTC right now and wait for them to start withdrawls back up,
and that would indeed net you a nice bit (assuming the market doesn't
fluctuate very much during that event). However, right now it seems most are
betting against that ever happening.

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97s
I tell you one thing, if I was in control of MtGox I would be buying all these
bitcoin's up and making a huge profit when I indeed did fix my problems.
Insider Trading in Bitcoins is basically happening right now IMO. This seems
like a brilliant scheme to not only fix your business public persona by
restoring and refunding everyone their money, but also make leaps and bounds
of cash.

Crash your own market, buy your coins back knowing your going to restore it.
Restore your market, prices come back up, huge profits.

EDIT: unless I misunderstand how all this works. I am assuming public sales
coins for lowered value, mtgox insider buys knowing they are going to fix
problems, mtgox insider then sells later.

~~~
grey-area
_I tell you one thing, if I was in control of MtGox I would be buying all
these bitcoin 's up and making a huge profit when I indeed did fix my
problems. _

That mtgox is not in fact doing this (through a buyback program or proxies)
tells you a lot about their confidence in their eventual recovery. If they
were confident in recovery they could backstop prices and make a killing later
by selling.

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jonpo
This sort of nonsense is why I will never touch bit-coin... Good luck..

~~~
VLM
Its not nonsense so much as system borders.

Look at the border between the Argentine financial system and ours. I suspect
you want to be very careful right now... Or the Ukraine, where a shooting
civil war has broken out today, I imagine forex market is going to get weird.
Or the euro PIIGS recently or right now. Or Zimbabwe for the last decade or
so. Or Germany in the 20s.

Anytime you cross financial system borders, especially if you don't understand
them or even understand that there is a border, things can get a bit dicey.

I guess what I'm getting at is you're describing an emergent property of cross
financial system transactions, nothing to do with BTC at all other being one
particular example of a cross system border.

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beedogs
People really need to stop consulting mtgox for BTC prices. I still hear it's
"the largest exchange" on the news from time to time, which is equally stupid,
as it hasn't been that in a long time. It's a poorly-run, irrelevant exchange,
and I feel sorry for the folks with money trapped there.

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foobarqux
The question everyone should be asking is how are they funding operations with
no more cash flow.

~~~
rdmcfee
Their cashflow hasn't halted. There are still plenty of trades happening
between current GOX customers and they still get trading fees on these trades.
The problem is that their customer acquisition and retention will take a
massive hit because customers can't withdraw their coins (or fiat in a timely
fasion).

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sbolak
I feel bad for anyone that buys any of the MtGoxBTC right now.

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ChristianMarks
The MtGox Bitcoin deserves to go to zero.

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dpanah
Can Mt.Gox buy at $260 at home and cash at $650 elsewhere and laugh all the
way to the bankster?

~~~
jellicle
Yes, if Mt. Gox is certain they can deliver on the locked-up account bitcoins,
then it can use its cash reserves to buy bitcoins elsewhere, then trade with
its own account holders, effectively letting them cash out a little early in
return for Mt. Gox taking 50% of the value.

Alternately, if Mt. Gox is certain they canNOT or will not deliver on the
locked-up bitcoins, they can trade some of the locked-up non-existent ones for
real ones and recover 50% of the value.

Either way, Mt. Gox makes a killing because they know the state of their books
and their future intentions and you do not. They can bet knowing the outcome
of the bet.

This is why you want financial regulation.

(Incidentally, this is what Goldman Sachs is doing with aluminum and other
commodity markets.)

If Mt. Gox has your money or fake money, you need to contact a good class
action law firm and see if you can get them interested.

~~~
thrill
I do not want financial regulation of virtual currency. I want people to be
able to decide for themselves if they understand and are willing to take on
risk - if they are not, then don't. Only allowing winners and losers and warts
and unicorns will allow virtual currencies to find their place.

I DO want fraud prosecution, but we already have that.

~~~
gamblor956
Currency _shouldn 't be_ risky. It's a means of transacting. People shouldn't
have to assume risk just to transact; they'll simply choose a less risky
vehicle. It's fundamentally why Bitcoin won't succeed unless and until it gets
its volatility under control.

