MtGox liquidation.. How will selling 200,000[btc] affect the price?

Harley997

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Quote from: ShakyhandsBTCer on June 12, 2014, 10:24:25 PM

Quote from: bryant.coleman on April 25, 2014, 10:38:42 AM

Quote from: spazzdla on April 25, 2014, 08:35:41 AM

Do they not have to split up all the BTC between everyone gox owes BTC too...?

As already discussed here many times, unfortunately that is not going to happen. As a part of the liquidation process, the authorities will auction off the remaining Gox coins and convert them to fiat.

There is no real precedent to liquidating bitcoin (or other electronic currency) in a bk proceeding. It appears that the law would probably have the coins be sold, but it would not be too much of a stretch to say a new precedent could be formed.

Unless someone outright buys Gox they are going to liquidate.

ShakyhandsBTCer

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It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: bryant.coleman on April 25, 2014, 10:38:42 AM

Quote from: spazzdla on April 25, 2014, 08:35:41 AM

Do they not have to split up all the BTC between everyone gox owes BTC too...?

As already discussed here many times, unfortunately that is not going to happen. As a part of the liquidation process, the authorities will auction off the remaining Gox coins and convert them to fiat.

There is no real precedent to liquidating bitcoin (or other electronic currency) in a bk proceeding. It appears that the law would probably have the coins be sold, but it would not be too much of a stretch to say a new precedent could be formed.

Ron~Popeil

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Could be a good buying opportunity for sure. I hate seeing this happen to members of the community though.

CEG5952

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Buy and sell bitcoins,

Quote from: AndersAA on April 16, 2014, 07:03:59 AM

http://www.startribune.com/world/255457651.html

So... They are going to liquidate. Won't that completely crash the exchange rate?

I imagine if any of it makes its way to an exchange, it would be in small trickles. Most likely situation is that this will really soak up off-exchange buying pressure. And that could spill over to the exchange rate, for sure.

Harley997

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They will likely sell via an auction to most likely large buyers. Similar to how the seized Silk Road coins were sold.

bryant.coleman

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Quote from: spazzdla on April 25, 2014, 08:35:41 AM

Do they not have to split up all the BTC between everyone gox owes BTC too...?

As already discussed here many times, unfortunately that is not going to happen. As a part of the liquidation process, the authorities will auction off the remaining Gox coins and convert them to fiat.

nuff

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Quote from: bryant.coleman on April 20, 2014, 12:09:09 AM

Quote from: Peter R on April 19, 2014, 11:46:46 PM

If you believe that 99% would not buy bitcoin when they receive their disbursement from the liquidation, then do you also believe that 99% would have sold the bitcoins had they received the disbursement in bitcoin rather than fiat?

Selling your bitcoins is another thing. But once gain buying Bitcoins for the cash is entirely different. I know 3-4 people who have lost money in Mt Gox (I myself lost BTC0.001). All of them are distraught and have lost their interest in Bitcoins. Bad for them, they decided to keep all their coins in an exchange. Most of them were active in the crypto-scene for almost 2 years. But now, they have quit.

I have tried to persuade them to collect BTCs once again. Know what? They are asking me, Bitcoin scams are happening every now and then. Most of the Bitcoiners refuse to do anything against it (freezing the stolen coins.etc), then why should they trust in crypto anymore?

I myself has lost 80% of my coins in BTCT.co. If I lose my remaining 20%, then I'll also quit dealing with BTCs. Grin

The question of whether or not they trust cryptos is irrelevant. Like it or not, cryptos, like the internet, once invented, is here to stay. Cryptos in itself is a trustless system after all, so it's kinda an oxymoron as well.

Look, all of these so called 'scams' are due to human actions. By blaming Bitcoin it's like, you're not careful with your money you blame the money scamming you, that's just how ridiculous it sounds.

spazzdla

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Do they not have to split up all the BTC between everyone gox owes BTC too...?

Cryptogirl82

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Quote from: AndersAA on April 16, 2014, 07:03:59 AM

http://www.startribune.com/world/255457651.html

So... They are going to liquidate. Won't that completely crash the exchange rate?

this will have a long term effect like I have already predict in the past. See the price drop today.

bryant.coleman

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Quote from: adrian33 on April 24, 2014, 12:55:10 PM

Well, perhaps that means the reserve price is 0 -- they will be sold, no matter what the price. I don't know.

A lot of people are already lining up for the auction. So I don't expect anything more than a 20% discount to happen. And there is a chance that the winner of the auction decides to hold on to to his coins, rather than selling them in the exchanges.

adrian33

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Quote from: bryant.coleman on April 24, 2014, 12:33:10 PM

converted into cash, the investigation of the claims, etc. will be conducted, and if funds for a distribution are secured, the liquidating distribution will be made.

Well, perhaps that means the reserve price is 0 -- they will be sold, no matter what the price. I don't know.

bryant.coleman

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^^^ This is what we got fro the Mt Gox website:

Quote

The bankruptcy trustee will implement the bankruptcy proceedings, in which the assets of the bankrupt entity will be managed and converted into cash, the investigation of the claims, etc. will be conducted, and if funds for a distribution are secured, the liquidating distribution will be made.

They are just saying that assets of the bankrupt entity will be managed and converted into cash. There is no clause saying that the coins could not be later sold through the exchanges.

adrian33

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They may go to private sale, but the buyer (or buyers) could put them on the open market if they wanted... or had to... right? (unless they signed some contract not to, and who would... and wouldn't that lower their perceived value.)

bryant.coleman

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Quote from: Fatpony on April 23, 2014, 01:24:40 PM

No one will sell that amount and affect the price, who in the right mind will dig their own grave...

That is an incorrect argument. Imagine a thief who managed to steal BTC886,000 without spending even a penny. Even if he sells his coins for just $10, it is a net profit for him. Let's hope he is not that clever. Grin

Peter R

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Quote from: AndersAA on April 23, 2014, 04:47:59 AM

Quote from: Peter R on April 20, 2014, 12:48:59 AM

Quote from: bryant.coleman on April 20, 2014, 12:09:09 AM

I myself has lost 80% of my coins in BTCT.co. If I lose my remaining 20%, then I'll also quit dealing with BTCs. Grin

It sucks to lose wealth to incompetent or unscrupulous third parties. I think what we need is a trustless system for storing, transporting, and exchanging value with users across the world, without having to rely on third parties. It would be nice if we just needed to protect one piece of information to secure our funds too. Something like a 78-digit number that nobody could ever guess.

I bet something like that would really catch on.

Probably would... I suppose we could use cryptographic signatures to sign transactions and maybe a public ledger to protect us against duplicate transactions.

Brilliant idea to use cryptographic signatures. That way we can prove knowledge of our 78-digit passwords without actually trusting them to a third-party. Now we just need a practical method to timestamp transactions. I wonder if we could use a proof-or-work based peer-to-peer network of nodes?

Quote

Why didn't anyone think of this before the gox scandal?

Yeah, so weird. Think of the damage that could have been prevented if such a system had existed.

Fatpony

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Those coins will never be sold at once and in a public sale. Some small % will but large portion, never. No one will sell that amount and affect the price, who in the right mind will dig their own grave...

bryant.coleman

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Quote from: Peter R on April 20, 2014, 12:48:59 AM

It sucks to lose wealth to incompetent or unscrupulous third parties. I think what we need is a trustless system for storing, transporting, and exchanging value with users across the world, without having to rely on third parties.

Such a system would be good.... but I fear that it will be against the basic principles of Bitcoin (decentralized currency, controlled by no one). So the third parties are here to stay.

AndersAA

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Quote from: Peter R on April 20, 2014, 12:48:59 AM

It sucks to lose wealth to incompetent or unscrupulous third parties. I think what we need is a trustless system for storing, transporting, and exchanging value with users across the world, without having to rely on third parties. It would be nice if we just needed to protect one piece of information to secure our funds too. Something like a 78-digit number that nobody could ever guess.

I bet something like that would really catch on.

Probably would... I suppose we could use cryptographic signatures to sign transactions and maybe a public ledger to protect us against duplicate transactions. Why didn't anyone think of this before the gox scandal?

Peter R

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Quote from: bryant.coleman on April 20, 2014, 12:09:09 AM

Quote from: Peter R on April 19, 2014, 11:46:46 PM

If you believe that 99% would not buy bitcoin when they receive their disbursement from the liquidation, then do you also believe that 99% would have sold the bitcoins had they received the disbursement in bitcoin rather than fiat?

I myself has lost 80% of my coins in BTCT.co. If I lose my remaining 20%, then I'll also quit dealing with BTCs. Grin

It sucks to lose wealth to incompetent or unscrupulous third parties. I think what we need is a trustless system for storing, transporting, and exchanging value with users across the world, without having to rely on third parties. It would be nice if we just needed to protect one piece of information to secure our funds too. Something like a 78-digit number that nobody could ever guess.

I bet something like that would really catch on.

bryant.coleman

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Quote from: Peter R on April 19, 2014, 11:46:46 PM

If you believe that 99% would not buy bitcoin when they receive their disbursement from the liquidation, then do you also believe that 99% would have sold the bitcoins had they received the disbursement in bitcoin rather than fiat?

Selling your bitcoins is another thing. But once gain buying Bitcoins for the cash is entirely different. I know 3-4 people who have lost money in Mt Gox (I myself lost BTC0.001). All of them are distraught and have lost their interest in Bitcoins. Bad for them, they decided to keep all their coins in an exchange. Most of them were active in the crypto-scene for almost 2 years. But now, they have quit.

I have tried to persuade them to collect BTCs once again. Know what? They are asking me, Bitcoin scams are happening every now and then. Most of the Bitcoiners refuse to do anything against it (freezing the stolen coins.etc), then why should they trust in crypto anymore?

I myself has lost 80% of my coins in BTCT.co. If I lose my remaining 20%, then I'll also quit dealing with BTCs. Grin

Peter R

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Quote from: bryant.coleman on April 19, 2014, 11:04:42 PM

Quote from: Peter R on April 19, 2014, 04:47:56 PM

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors). These are the same people who just lost 750k BTC. I would expect many of these people to purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol].

Complete BS. You are talking about people who have already lost huge amounts of money by investing in Bitcoin. 99% of them will never invest in Bitcoin again. It is going to drive the price of Bitcoins down, and it is going to result a decline in the number of people who possess Bitcoins.

If you believe that 99% would not buy bitcoin when they receive their disbursement from the liquidation, then do you also believe that 99% would have sold the bitcoins had they received the disbursement in bitcoin rather than fiat?

I also think your statement "99% of them will never invest in Bitcoin again" might be a bit of an exaggeration. I know that any disbursement I receive will go into bitcoin.

I still don't think the direction of the anticipated price movement is clear.

bryant.coleman

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Quote from: Peter R on April 19, 2014, 04:47:56 PM

If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors). These are the same people who just lost 750k BTC. I would expect many of these people to purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol].

Complete BS. You are talking about people who have already lost huge amounts of money by investing in Bitcoin. 99% of them will never invest in Bitcoin again. It is going to drive the price of Bitcoins down, and it is going to result a decline in the number of people who possess Bitcoins.

Peter R

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Quote from: counter on April 17, 2014, 12:52:01 PM

I'd say it depends on how the coins were sold and who bought them in a scenario like this. But shouldn't those coins be returned to their right full owners?

You just showed what people worried about the sale dropping the price are missing. If the 200k BTC are liquidated, the funds raised will be distributed to the creditors (who a primarily Gox depositors). These are the same people who just lost 750k BTC. I would expect many of these people to purchase bitcoins once they receive their share of the fiat [which ironically was raised by selling their bitcoins in the first place lol].

So I don't think the direction of the anticipated price movement is clear.

bryant.coleman

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Quote from: counter on April 17, 2014, 12:52:01 PM

I'd say it depends on how the coins were sold and who bought them in a scenario like this. But shouldn't those coins be returned to their right full owners?

Japan recognizes Bitcoin as a commodity, rather than as a form of currency. If it was otherwise, then the users would have got Bitcoins back. But now... there is no such hope. They will only get a compensation in JPY, which most of the users should convert to their local currency, incurring significant currency conversion charges.

STT

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Quote

you liquidate a bank, you don't auction the cash deposits which are with the bank at that time.

Depositors are creditors and the largest creditors are dealt with first so far as I know. I dont think its done equally but basically the money left in gox was part of its assets not the customers. Its not a trust fund, Ive heard no mention of ring fencing to account funds. So this money is not customers but part of the business holdings though there is a liability to repay deposits, its further down a queue of debts. It might be they pay out nothing to the smallest holders.

Just my guess but obviously theres no insurance or protection scheme like a retail bank.

One of my brokers liquidated like this. In theory the cash was mine, I put it there but the company had (illegally) done like Gox and become a fractional reserve type operation. So I only got a refund from a gov scheme, the overseer or taxer of these companies sent me a small cheque

zzojar

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wow that would be so cool if someone dumped that many at the exchange all at once. That would mean cheap bitcoins for a lot of people. I'd love that!!

counter

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Time is on our side, yes it is!

I'd say it depends on how the coins were sold and who bought them in a scenario like this. But shouldn't those coins be returned to their right full owners?

thresher

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Personally I think price will go up slightly as it shows there is some form of recovery for shit like this.

Also who is going to sell 20 percent of their holdings that were anywhere from 600 up when they are now worth 500?

Even if your a dumbass and purchased some gox coins on bitocinbuilder because you didn't see how gox could possibly get away with this (who would do so something so dumb Embarrassed

), you probably didn't buy in at less than 20 percent a coin.

adrian33

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Quote from: AndersAA on April 17, 2014, 04:57:22 AM

Am I incorrect?

Price goes up if more people think buyer was smarter, price goes down if vice versa.

"wow someone bought 200,000 bitcoins?.. why? maybe I should buy some too"
"wow someone sold 200,000 bitcoins?.. why? maybe I should sell some too"

or else generally more attention given to bitcoins, which is overall positive.

The worst would likely be if they were put for sale, and no one bought any, or they were sold at a deep discount.

AndersAA

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Quote from: Wolf Rainer on April 17, 2014, 04:26:53 AM

It will not affect the Btc price... Private sale, these bitcoins are not going to be dumped in an exchange.

Shouldn't matter if it's on an exchange or not. If someone can buy 2% of the worlds gold on the cheap one or more of three things will happen:

1) Buyer decides to make a quick profit and starts selling on exchanges - driving prices down.
2) Buyer doesn't have to buy 2% of the market on exchanges and demand falls - driving prices down.
3) Buyer just sits on the newly acquired "gold" - nothing changes (for now!).

Am I incorrect?

Wolf Rainer

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It will not affect the Btc price... Private sale, these bitcoins are not going to be dumped in an exchange.

pening

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Who are their creditors? I cant see it was costing alot to run the site, they shouldn't have run up large debts. So the main creditors will be the Bitcoin account holders, so in theory at least most of the coins should be distributed back to the accounts on the basis of how much they had before. Interesting, and very bad, precedent if this doesn't happen and they simply sell all then push cash to non-coin holders.

bryant.coleman

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Quote from: cryptomatt on April 16, 2014, 08:32:04 AM

Ya, they won't just dump them on bitstamp. It would be a private auction.

But first of all... who is going to permit the liquidation? Those 200,000 recovered coins belongs to the Mt Gox users. When you liquidate a bank, you don't auction the cash deposits which are with the bank at that time.

killinitsoftly

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The price will drop for a period of time, then begin to rise again.

adrian33

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As terrible as it is to lose coins in this fiasco, I think selling large slabs of coins to big buyers is arguably a very good thing for the ecosystem. Power buyers with influence will want to see the coin succeed.

Also, the liquidation is a good step at moving forward in general.

gondel

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Hi,
Think that the price will even go up if such a transaction is done..and also it is not sure if they will sell it for $ of other currencie or do it on small portions

Robert Paulson

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doesn't matter if they don't sell it on a public exchange.

someone who would have otherwise bought on bitstamp will instead buy from them and thus demand on bitstamp will be reduced.
this will lower the price temporarily until they are done selling and the old supply-demand equilibrium will be restored.

if they sell fast enough the price could really crash, this could be the buying opportunity of a lifetime.

wiggi

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Quote from: AndersAA on April 16, 2014, 07:03:59 AM

http://www.startribune.com/world/255457651.html

So... They are going to liquidate. Won't that completely crash the exchange rate?

"An administrator will try to sell the company's assets, and many creditors, including those who had bitcoins with the exchange, are unlikely to get any money back."

If this is true and not just sloppy reporting it would mean the bitcoins (and dollars) at the exchange are just subordinated debt and Gox owes someone else the equivalent of 200k BTC?

AndersAA

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Still... If someone can buy 200,000BTC without using an exchange shouldn't that affect the price somewhere down the line nonetheless?
Who says whoever buys it will just sit on it?

cryptomatt

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Ya, they won't just dump them on bitstamp. It would be a private auction.

gentlemand

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Welt Am Draht

IF they're permitted to sell them it certainly won't be anywhere near an exchange. I assume it'll be similar to the US silk road situation. The liquidator will field offers from private buyers. There were people lining up to buy the SR coins so it probably won't be any different.

AndersAA

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http://www.startribune.com/world/255457651.html

So... They are going to liquidate. Won't that completely crash the exchange rate?

Topic: MtGox liquidation.. How will selling 200,000[btc] affect the price? (Read 3500 times)