Been watching this for a while.
I don't know how it will end. He could end up paying out, he may not.
If he does pay out, I would really like to know why stop now, and what could he have possibly been doing to justify that kind of rate. My guess is drug money laundering, but that's only a guess.
What would be cool and possible is, given the fragility of the market, to accumulate a bunch of coins, cash out at a high price, tank the market, buy back at pennies on the dollar, and return coins to his investors. Everything would be legit - his customers would be receiving the right amount of coins, only the would be worth less.
I don't know how it will end. He could end up paying out, he may not.
If he does pay out, I would really like to know why stop now, and what could he have possibly been doing to justify that kind of rate. My guess is drug money laundering, but that's only a guess.
What would be cool and possible is, given the fragility of the market, to accumulate a bunch of coins, cash out at a high price, tank the market, buy back at pennies on the dollar, and return coins to his investors. Everything would be legit - his customers would be receiving the right amount of coins, only the would be worth less.
Allot of people on here figured that is what he did which is why we had a wild ride from 15 to 8 dollar value of coins. Not sure if that was his plan and if he did it but I don't think it was because only 150K of 500K coins he had were sold.
I saw that; on that day volume was also ~ 275k compared with normal ~75k.
Best case scenario Pirate was just day trading. see 8/8-8/9 for an example in the stock market: http://www.google.com/finance?q=NASDAQ:PCLN
PCLN lost $117 in a day, for no good reason.
Pirate was probably just controlling the market similarly, nudging the price along and then when enough had followed, taking it sharply in the opposite direction - first one in, first one out (buy low, sell high).
Why he quit? I dunno, maybe there is competition now for market making, meaning it's not as easy to control. Maybe he just got tired of being tied to the numbers game.
If he's smart, he'll continue this game all the way thru to the end. He'll be releasing 500k bitcoins. A lot of those coins are going to be sold, meaning the price will probably drop considerably. Meaning, he is probably sitting on a lot of cash right now, and as he lets coins go and they are sold, he'll be buying back into the market as the prices go lower and lower. Then once all the 500k are released, he'll wait for btc to crater (around ~1 or whatever), and then he'll buy back in with whatever cash he has leftover.
His clients will have their coins back, they just won't be worth as much.
I can see that but man oh man he is playing with fire in that version. If he does not get moving with more miners coming on line, ASIC and other market pressure he might not be able to move the markets as much as he likes. If he does and the cost drops before he sold all his coins then he will have a bunch of crap and a bad rep. All in all I think no matter what happens he is going to miss out on a bigger payday and his reputation is toast.
