Topic: Markets not reacting to loss of 100s of Millions of $ is disturbing (Read 5632 times)

It's speculation. But I believe it's the most consistent explanation for the information available -- Gox was believed to have over 700,000 Bitcoins when in fact they didn't have anywhere near that many. This "deficit" accumulated over time.

Where do you see them claiming that?

The problem with the Bitcoin exchange business model is that proper security is expensive and annoying. In the past, customers have believed exchanges when they simply say they are secure. So there was a perception that there was no need to spend more money on additional security -- it wouldn't bring you any more business. The problem has been that there has not been a significant financial incentive for exchanges to actually be secure.

If it turns out Gox actually lost access to Bitcoins that are now stuck in wallets nobody has the private keys to, that's a different situation entirely. Either way, it should be good for Bitcoin in the long term.

It's more like I just witnessed a bad car crash and I decide to stop driving because I am in shock.

Why should people who so their Bitcoins if they were not affected by mtgox? That's like if you lose your car keys and I have to sell my car because of that. Totally irrational.

Buying and selling is not relevant for the value. There are block rewards increasing the amount of coins, and there are lost coins. In my opinion, both of these are also mostly irrelevant. In a grander sense, the number of coins is fixed.

What is happening, is that people around the world are constantly reconsidering what value they place on a coin. That includes people that yesterday valued it to 0 or did not consider it at all, but today value it at something. That is, the market participants are constantly reviewing their valuation.

The price expressed on the market is a result of each of these individual valuation changes.

There are no dollars nor renminbis "going into" bitcoin. This is a false model.

Is this a fact or just a wild speculation?

Gox seems to be claiming that they lost the privkeys to their cold wallet. Good job, if that's the case. A sane company holding that kind of money would have created some kind of multiply-redundant offline solution and spent a lot of money for keeping the privkeys safe. A million dollars a year would not be exaggerating it.

The thing is, Gox's business model was actually valid and sound, and they made quite a bit of money in the past couple of years. Even though they lost some of it, unless the fiat and coins went somewhere, they ought to have had a lot more than the 2kBTC and the $20 million. The BTC holdings should be at least several dozen kBTC.

How is millions of $'s lost?! Get the facts right, the bitcoins are still there, it is just in different hands. Could it be possible the drop in price from 800~ to 500~ only due to the stolen bitcoins being dumped onto the various exchanges?

They purchased it for the European marketshare not the software.

Consider this, if WhatsApp is worth 19 Billion to Facebook and depending on which reports you believe, 10B to Google, how is Bitcoin worth only 3 billion (rough market cap at 300/btc).

There are other instant messenger apps, but their mind/market share of 400 million users was worth a premium.

I personally think Facebook would have been better served by building their own app or buying a smaller startup with better tech and paying $500 to the 1% most interconnected users to switch (cost ~10% of what they paid). If that wasn't enough throw $10 to all of the rest of the users to switch and it's still half as much as they paid and they don't have a poorly developed, security hole ridden pile of legacy code to fix.

Gratz you just described Gox.

Lol... trading back and forth.. is not buying.

OP is an idiot. Many traders already left gox six months ago. Gox is not bitcoin. Gox is irrelevant now. Do you know much btc the chinese buy every hour?

http://fiatleak.com

it's like a tug of war between good news and bad news

Most day traders have absolutely zero awareness of the adoption levels, propogation throughout the world right now, infratructure going up, ATM's being installed, etc, etc etc.

Most day traders' only awareness is the idiotic number on the market graph, and nonsense headlines from mainstream media sources.

This is why most day traders are bewildered that the price stays steady, after the Bankruptcy.  

Because like most people who are just trying to play the Bitcoin market, they don't have a clue what's going on out there, to prop up this price.

A substantial foundation is growing every day.  % of the price consisting of speculation is dropping every day.  This is why the price hasn't moved.  Others know what they're investing in.


-B-

There will only ever be 21 million bitcoins. For the sake of argument let's say 500k were lost. So ~2.4% of all bitcoins in existence were lost. This is as if you raided the COMEX and dropped the gold into the sun. All bitcoins in existence just became more valuable because of the loss. The well known effect of deflation is in effect. You could even argue that the fiat is locked away in the holders of bitcoin who didn't have their bitcoins on Gox.

I'm not selling and I have your fiat's value locked into my bitcoins. There are plenty of others like me. Gox users tried to get their fiat back when they sold off to ~$100. Mt Gox didn't have the fiat to let them because they couldn't trade it for bitcoins.

I feel for Gox users but the truth of the matter is that I have been enriched by their loss.

OP is hoping that the bitcoins have been stolen because then the thief might sell them off. And he is hoping the thief isn't a hodler. If the thief is then his selloff will never happen.

I will hold till the collapse of the dollar or zero. So will my idealistic brothers.

Gox is a terrible blow but bitcoin don't care. Bitcoin is a fucking honey badger.

You are a rare minority. And while it payed off for you this time, it doesnt always.

The lost 800 kBTC don't exist. Mt Gox doesn't have them. 800,000 Bitcoins that people thought were held at Mt Gox we now know did not actually exist. The only Bitcoins that do exist were already in circulation, already pushing the price down.

I'm just one datapoint, but that is exactly what I did in 2012 when I lost nearly all of my coins in Bitcoinica. I balked at the price (around 10 USD) and I did not buy as many as I lost but re-buy I did. (Of course, I avoid counter party risk like the plague now and keep everything in offline cold storage).

The reason I lost is because I misplaced trust in people, not because of a failure of the technology behind Bitcoin.

If you get scammed on the internet you also don't stop using it. You don't give up, you wise up.

The difference is between companies that have a slow and steady meltdown like Enron and MtGox, and companies which are seemingly OK like Bear Stearns and Lehman Brothers but catastrophically fail.

The market prices in meltdowns as everyone sees it happening. It is the catastrophic failures which catch the market by surprise, except for insiders who have sold much earlier.

You have to consider this from the point of view of bitcoin's newer investors, the big shots, who are throwing in a ton of fresh fiat at the $500-$1000 level. They're looking at bitcoin from a standpoint of the future, and the potential of bitcoin to become global currency. They are not looking at the past or the present and don't care about the drama unfolding in this feeble present exchange system. They're only investing because bitcoin is such a game changing technology that it is resilient, will work through this, and will still become a world dominating technology. They know that once the big boys enter, big U.S. exchanges are set up, merchant adoption really takes off, and wall street investors come in, all of this will be ancient history - a joke. They might be looking gox charts, gox volatility, and gox gross incompetence and mismanagement over years and think 'good riddance'. In fact all of these exchanges are a joke for them - they're all unregulated and mysterious. For example, I went to prepare my taxes and I cannot even find any kind of tax documents on any exchange I use. These exchanges are like.. bitcoin is still in kindergarten. New investors are just waiting... for the moment all of this, this legacy system, goes away and bitcoin gets serious with a real infrastructure. Any time they can buy and get in before the revolution is a great price. Any time they are not in a risk that tomorrow some new U.S. company makes an announcement and prices skyrocket.

In a way I can understand OP's point of view, for example if a major investment bank like Goldman sachs tanks tmrw it would have a catastrophic affect on the stock markets and they wouldn't rebound within the same day.

However I think the main reason for this is that gox has been losing market share in the past 3 months, and you have a large number of holders this time holding $800+ bitcoins refusing to sell. And also miners are refusing to sell at current prices as it is almost a loss to sell right now.  These factors along with bitcoin's strong fundamentals are keeping prices above $500