I'm not sure I would go so far as to say Mt. Gox will go bankrupt... But there will definitely be some hell for them to pay. They have not handled this well at all, and it's quite absurd for them to turn off exchanges for "market cooldown."
I'm sure they think they're doing what's best for the bitcoin economy, but they really just aren't approaching this with a very good understanding, it would seem...
Topic: Reasons MtGox is an anchor-necklace to btc for now (Read 401 times)
I have dollars and popcorn ready, bring it.
Bitstamp has continued to trade through this, albeit with some outages.
I agree with the pricing assertions, it could easily be chaos.
I agree with the pricing assertions, it could easily be chaos.
I doubt you will be banned from the forum for expressing what may be an alternative opinion. Since BTC's value is faith based as a trusted medium of exchange and possibly a store of value, people's loss of faith in the largest BTC exchange could be, well, problematic.
We will soon know.
We will soon know.
I open this point knowing it will be thrashed, but it is my opinion that it is NOT advisable to re-enter a position in bitcoins before Mt Gox re-opens.
I know that btc-e is allowing transfers of btc and their exchange is, technically, still open. But I promise you (as a veteran of many years of stock trading) the volume to the downside to come will be great. This happened with online stock exchanges, many of which went bankrupt after market panics. In a panic, the only place people trust their money "safe" is when they have it in hand. The stock market downturns were not what did online stock brokerages in, it was the fear that their solvency would jeopardize account holder's ability to successfully redeem their cash from the exchange. A storm of monetary outflows (redemption requests- "people cashing out") becomes a self-fulfilling prophecy.
If the accounting practices are anywhere near as underdeveloped at Mt Gox as their btc trading platform, the exchange will be perish under the weight of cash redemption requests to come once they re-open. Simply selling btc will not be enough for "investors" who were trying to time the market bubble. They will not stop panicking until Mt Gox has ponied up their cash and transferred it to their bank of choice. This will bankrupt Mt Gox, who undoubtedly will demonstrate SIGNIFICANT delays in processing cash-out requests. Once these delays are evident, redemption requests will accelerate, and Mt Gox will quickly find itself cash poor. I know many will argue that the cash "simply changed hands, not disappear" and that it will still be there, but I promise you even the regulated stock exchanges came up short. In this case, an unregulated market, unregulated exchange, and Magic The Gathering roots, how much credibility do you think truly exists? This is why btc is borderline illegal in the first place. I like the idea of btc, and hope it carries on, but this is not set up to end well. If it happened in stocks, which are regulated by federal laws, it will happen here where they have no obligation to anyone. On that note, I'll probably be banned from the forum. I'm not bashing btc. Like I said, I agree with the concept. But people must demand accountability, security, and oversight of the online exchanges for btc to be real. If you expect everyone to wear a hacker-proof super-encrypted USB necklace, btc will never be more than a condescending socially-inept nerd toy.
I know that btc-e is allowing transfers of btc and their exchange is, technically, still open. But I promise you (as a veteran of many years of stock trading) the volume to the downside to come will be great. This happened with online stock exchanges, many of which went bankrupt after market panics. In a panic, the only place people trust their money "safe" is when they have it in hand. The stock market downturns were not what did online stock brokerages in, it was the fear that their solvency would jeopardize account holder's ability to successfully redeem their cash from the exchange. A storm of monetary outflows (redemption requests- "people cashing out") becomes a self-fulfilling prophecy.
If the accounting practices are anywhere near as underdeveloped at Mt Gox as their btc trading platform, the exchange will be perish under the weight of cash redemption requests to come once they re-open. Simply selling btc will not be enough for "investors" who were trying to time the market bubble. They will not stop panicking until Mt Gox has ponied up their cash and transferred it to their bank of choice. This will bankrupt Mt Gox, who undoubtedly will demonstrate SIGNIFICANT delays in processing cash-out requests. Once these delays are evident, redemption requests will accelerate, and Mt Gox will quickly find itself cash poor. I know many will argue that the cash "simply changed hands, not disappear" and that it will still be there, but I promise you even the regulated stock exchanges came up short. In this case, an unregulated market, unregulated exchange, and Magic The Gathering roots, how much credibility do you think truly exists? This is why btc is borderline illegal in the first place. I like the idea of btc, and hope it carries on, but this is not set up to end well. If it happened in stocks, which are regulated by federal laws, it will happen here where they have no obligation to anyone. On that note, I'll probably be banned from the forum. I'm not bashing btc. Like I said, I agree with the concept. But people must demand accountability, security, and oversight of the online exchanges for btc to be real. If you expect everyone to wear a hacker-proof super-encrypted USB necklace, btc will never be more than a condescending socially-inept nerd toy.
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