6 ms·

As MtGox trading remains suspended, bitcoin price falls from $160 to $60

48 points by gabemart 14y ago

deleted 14y ago
[deleted]
minimaxir 14y ago
The reactions on r/bitcoin, are interesting and tragic. The title of the top thread with 515 comments: I think this subreddit should seriously consider having suicide hotline info posted http://www.reddit.com/r/bitcoin http://www.reddit.com/r/bitcoin
- drivebyacct2 14y ago
  To be fair, most of those are from 6+ hours ago.
  - minimaxir 14y ago
    True. That just means it's going to get worse once the 60% drop today is accounted for, and looking at the new posts, people are in a panic.
    - drivebyacct2 14y ago
      I'm definitely just waiting to see what's up when Mt.Gox comes back online. Wish I had some money in btce to buy a few though.
IgorPartola 14y ago
So one thing I've noticed and have been logging for a while is the fact that there is huge disparity between prices on various exchanges. My first inclination was to create an arbitrage bot that would buy on one exchange, then transfer to another, and sell again. There are numerous problems with this approach, not the least of which is that you can only really transfer BTC between exchanges and not other currency. My next thought was this: watch MtGox and assume that it drives the market price. Then buy/sell on another exchange, taking advantage of the fact that there is a delay. Long story short, it's not as easy as this. However, there is definitely an opportunity for arbitrage here as for example currently BTCe is showing $65, while BitStamp is showing $61.
- mikeash 14y ago
  Are transaction fees small enough for that to work? $65 versus $61 is only about a 6% difference, and you need two transactions for each trip, so the fees would have to be under ~3%.
  - dfc 14y ago
    Fees are under 1%. Mtgox's highest fee is 0.55% and bitstamp's highest is 0.5%
    - mikeash 14y ago
      Better than I expected, obviously. Thank you.
  - PaperclipTaken 14y ago
    Generally, exchanges take less than 1%. Mt. God takes .6%, and at least one exchange (bitcoin24?) takes 0%. So there is definitely room for this.
- bdr 14y ago
  Don't forget to look at the bid/ask instead of just the last traded price. Big spreads lately might make it look like there's an arbitrage opportunity when there really isn't.
Helianthus 14y ago
Please. Bitcoin fanatics, come out and tell me that Bitcoin will change the world. That there will come another rise, and this time it won't be a bubble. Because I know you think these things, that you're true believers, and you think that an unregulated currency with a track record of insane volatility will replace our means of commerce somehow. Here's the thing: The majority of people that have Bitcoins now are the people that don't want to sell them. Ever. The mainstream media watched you this time. It saw just how dysfunctional Bitcoin is. You lost.
- drcode 14y ago
  I for one would be happy if the MSM would stay out until bitcoins are ready for prime time (another year perhaps)
  - pyre 14y ago
    | ready for prime time (another year perhaps) Could this become another "Year of the Linux Desktop" meme? ;-)
- drivebyacct2 14y ago
  "You lost." I don't know if I'm more annoyed by your smug attitude (and the attitude that many others here have regarding Bitcoin), or if I just feel sorry for you that you have to be this smug and condescending about having been "right" that it is in a slump.
  - Helianthus 14y ago
    I'm gloating like mad because I'm tired of the cloud of idealism that crops up in every Bitcoin article. I want to be rid of this financial magical thinking. I ain't gonna apologize for that. And I rather think your smug/condescending quota doubles mine.
    - drivebyacct2 14y ago
      If I were a bigger ass, I'd just write "umad bro" and walk away. That would be about at your level, seeing as you pretty much just said "I'm mad because people thought Bitcoin had a brighter future." Not sure if you're mad at those of us that made a ton of money from holding and selling. Or are mad at those of us that wanted to trade with them. Or are you just mad at the silly people claiming Bitcoins would rule the world? Either way, you seem very mad over something that is worthy of no anger... unless you feel personally spurned by not having bought/sold as others?
awnird 14y ago
You seem to have capitalized the name of the exchange incorrectly. It's not MtGox (like a mountain), it stands Magic The Gathering Online Exchange, a website where you can trade children's playing cards.
- lordgilman 14y ago
  They've changed the name, it is officially MtGox with no official acronym.
- gabemart 14y ago
  > Buy bitcoin at Mt.Gox the world's largest and oldest bitcoin exchange! [1] Regardless of their origins, they now use this CamelCase. In fairness, I did omit the period, inexplicably. [1] https://mtgox.com/ https://mtgox.com/
- daeken 14y ago
  > it stands Magic The Gathering Online Exchange, a website where you can trade children's playing cards. I'm not sure if you did it to drive the point or not, but Magic: The Gathering is by no means "for children". The average age of players is way over 18 in most areas. (Slightly biased as someone who's been playing M:TG for over 18 years.)
- mikeash 14y ago
  You should tell the guys at mtgox.com about this, as they appear to have this error all over their web site.
obilgic 14y ago
Speculations affect every currency or share. But it affects bitcoin stronger because of its low market cap. Think bitcoin as a some random micro cap manufacturing company located overseas, one news coverage and everything changes.
- robinh 14y ago
  Not only that, but MtGox handles over 80% of all bitcoin trade. No wonder it's plummeting; every currency would be greatly affected by something like that.
- InclinedPlane 14y ago
  Can you describe the mechanisms in the bitcoin system which will drive down the investment-based and speculation-based trading and drive up the currency-based trading? It seems to me that the exact opposite trend is more likely. The use of bitcoin as a currency will become increasingly swamped by speculative investments and the swings in value will only get larger and larger, not smaller.
DanBlake 14y ago
Is it likely the mass sell off will come once mtgox reopens? Certainly many have their bitcoins tied in there and will begin selling once open?
- gabemart 14y ago
  While I'm not qualified to say, I certainly would predict so. Many price-monitoring tools pull data from MtGox. For anyone using those tools, the price has been stable at $125 for the last few hours and will stay that way until the exchange reopens at whatever the price is then (currently around $65). When that jump happens, I can only imagine a vast quantity of BTC will be sold and the price will crash.
ttrreeww 14y ago
There really was no need for the hardware upgrade. The volume won't be coming back anytime soon.
akcreek 14y ago
The link in the article has BTC at $65 right now and http://realtimebitcoin.info http://realtimebitcoin.info has it at $124.90. How is that possible? Edit- It looks like http://realtimebitcoin.info http://realtimebitcoin.info is using mtgox for their data, which explains the discrepancy.
- gabemart 14y ago
  That site is pulling data from Mt.Gox, the largest exchange. Mt.Gox suspended trading a few hours ago, and has been showing a "last price" of $124.90 since. On other exchanges (where trading is not suspended), the price is currently hovering at $60-$65. Mt.Gox reopens at 02:00 UTC. (This comment was written at approx 22:25 UTC, so when this comment is about 3.5 hours old. When that happens, I predict, all hell will break loose.
billpg 14y ago
Is there a list of distinct URLs of Bitcoin charts, for next time the rate goes crazy?
leoh 14y ago
I'm not terribly impressed with Bitcoin. But it might be possible to make a few bucks on this downturn. "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffet
pmorici 14y ago
So I don't quite understand is the falling price because mtgox is down for maintenance (if so why does it have that effect, I don't run into the street and burn my cash just because the banks are closed on Sundays) or is that just a coincidence?
- dragonwriter 14y ago
  > So I don't quite understand is the falling price because mtgox is down for maintenance It had already dropped considerably (below $130, IIRC) from the ~$200 it had bounced back to from the earlier drop from $266 by the time MtGox shut down trading. The shutdown of trading at MtGox may have encouraged further decline across other markets, but it doesn't seem to be the original source of the decline. > if so why does it have that effect, I don't run into the street and burn my cash just because the banks are closed on Sundays OTOH, you might demand more dollars for goods (or just be less likely to accept them at all), or, on the other side, accept less good for dollars and be more eager to get rid of them if the main outlet for trading dollars for other currency shut down on a day that it would normally have been open (e.g., not a regular Sunday office closure) after a day of high volatility trading where the dollar had lost half its value before the trading was shutdown.
- pseudonym 14y ago
  MtGox is not the only exchange, although it might seem that way sometimes. It would be like your bank is closed on Sunday, but there's still banks from the same branch open next door. Because the blockchain is shared, the only thing that mtgox being down prevents you from doing is buying/selling with money stored on mtgox itself-- you can still move money from your personal wallet(s) (you're not keeping 100% of your BTC on mtgox, right?) to another exchange and sell it there.
- yebyen 14y ago
  Imagine what it would be like if there were bank holidays, but they are not predictable in a calendar sense in advance like our holidays... and every bank has their own list of holidays. And also there are only five banks. I think the price is falling because there's been a speculative bubble rising, and the speculators' confidence is a fickle thing. Maybe up until now, you were a speculator and you didn't think you needed to go anywhere else. Now Mt.Gox has frozen trading and they are also not processing withdrawals. Most people stop trading too. So, it's a fire sale, because nobody knows if our bubble will blow itself back up again, or how long it's going to take for that to happen. If you were keeping 2/3 of your money at Mt.Gox and now you're afraid that it's utterly gone (at least you know you won't be trading it today), so you've only got 1/3 of what you had, and everyone in town says it's worth 1/7 what it was yesterday. A few people would surely take the money and get rid of it.
krcz 14y ago
Recent research has shown that placebo works even when patient knows (s)he's getting placebo. Now it looks like the economic bubble works even when everyone knows it's a bubble: http://imgur.com/jvSKdEv http://imgur.com/jvSKdEv
- illuminate 14y ago
  "Recent research has shown that placebo works even when patient knows (s)he's getting placebo." Huh? Why would it be surprising that placebos work when the patient knows they're getting the placebo? http://www.ncbi.nlm.nih.gov/pubmed/20091554 http://www.ncbi.nlm.nih.gov/pubmed/20091554
PaperclipTaken 14y ago
Bitcoin is not dead, it will come back. Technically, it won't even disappear. Bitcoin has many fundamental uses as an exchange of value (note the vernacular) that is not done properly by anything else. It is the reason that markets like the Silk Road can exist. The "fundamental" flaw of bitcoin is that it is deflationary. This causes mass speculation, which causes instability. It's instability means that it is not a good store of value. It is good for exchange of value under certain conditions (anonymous, distributed, trust required, cryptographic, etc.). Bitcoin is taking a hit right now because all of the speculators are cashing out (or panicking, or whatever). Most of the people who use bitcoin for it's fundamental strengths only hold on to bitcoin briefly. This is one of the (perhaps unintended) features of the commodity. Bitcoin is not good for measuring value. You would never set a price in terms of bitcoin. You would set the price in terms of dollars or euros and then use a conversion to figure out what the price in bitcoins should be. This will probably always be the case for bitcoin transactions, because that's just how bitcoin is. But as long as bitcoin does 'distributed, anonymous, and cryptographic' better than everybody else, it will be used for those strengths, and this will keep it alive. Bitcoin is not dead until there is something to replace it. A market crash does not count. It just makes for some sad speculators.
teeja 14y ago
Back up to 82 ... end of the milking machine for today.

48 points by gabemart 14y ago

deleted 14y ago

[deleted]

The reactions on r/bitcoin, are interesting and tragic. The title of the top thread with 515 comments: I think this subreddit should seriously consider having suicide hotline info posted http://www.reddit.com/r/bitcoin http://www.reddit.com/r/bitcoin

drivebyacct2 14y ago
To be fair, most of those are from 6+ hours ago.
- minimaxir 14y ago
  True. That just means it's going to get worse once the 60% drop today is accounted for, and looking at the new posts, people are in a panic.
  - drivebyacct2 14y ago
    I'm definitely just waiting to see what's up when Mt.Gox comes back online. Wish I had some money in btce to buy a few though.

IgorPartola 14y ago

So one thing I've noticed and have been logging for a while is the fact that there is huge disparity between prices on various exchanges. My first inclination was to create an arbitrage bot that would buy on one exchange, then transfer to another, and sell again. There are numerous problems with this approach, not the least of which is that you can only really transfer BTC between exchanges and not other currency. My next thought was this: watch MtGox and assume that it drives the market price. Then buy/sell on another exchange, taking advantage of the fact that there is a delay. Long story short, it's not as easy as this. However, there is definitely an opportunity for arbitrage here as for example currently BTCe is showing $65, while BitStamp is showing $61.

mikeash 14y ago
Are transaction fees small enough for that to work? $65 versus $61 is only about a 6% difference, and you need two transactions for each trip, so the fees would have to be under ~3%.
- dfc 14y ago
  Fees are under 1%. Mtgox's highest fee is 0.55% and bitstamp's highest is 0.5%
  - mikeash 14y ago
    Better than I expected, obviously. Thank you.
- PaperclipTaken 14y ago
  Generally, exchanges take less than 1%. Mt. God takes .6%, and at least one exchange (bitcoin24?) takes 0%. So there is definitely room for this.
bdr 14y ago
Don't forget to look at the bid/ask instead of just the last traded price. Big spreads lately might make it look like there's an arbitrage opportunity when there really isn't.

Helianthus 14y ago

Please. Bitcoin fanatics, come out and tell me that Bitcoin will change the world. That there will come another rise, and this time it won't be a bubble. Because I know you think these things, that you're true believers, and you think that an unregulated currency with a track record of insane volatility will replace our means of commerce somehow. Here's the thing: The majority of people that have Bitcoins now are the people that don't want to sell them. Ever. The mainstream media watched you this time. It saw just how dysfunctional Bitcoin is. You lost.

drcode 14y ago
I for one would be happy if the MSM would stay out until bitcoins are ready for prime time (another year perhaps)
- pyre 14y ago
  | ready for prime time (another year perhaps) Could this become another "Year of the Linux Desktop" meme? ;-)
drivebyacct2 14y ago
"You lost." I don't know if I'm more annoyed by your smug attitude (and the attitude that many others here have regarding Bitcoin), or if I just feel sorry for you that you have to be this smug and condescending about having been "right" that it is in a slump.
- Helianthus 14y ago
  I'm gloating like mad because I'm tired of the cloud of idealism that crops up in every Bitcoin article. I want to be rid of this financial magical thinking. I ain't gonna apologize for that. And I rather think your smug/condescending quota doubles mine.
  - drivebyacct2 14y ago
    If I were a bigger ass, I'd just write "umad bro" and walk away. That would be about at your level, seeing as you pretty much just said "I'm mad because people thought Bitcoin had a brighter future." Not sure if you're mad at those of us that made a ton of money from holding and selling. Or are mad at those of us that wanted to trade with them. Or are you just mad at the silly people claiming Bitcoins would rule the world? Either way, you seem very mad over something that is worthy of no anger... unless you feel personally spurned by not having bought/sold as others?

awnird 14y ago

You seem to have capitalized the name of the exchange incorrectly. It's not MtGox (like a mountain), it stands Magic The Gathering Online Exchange, a website where you can trade children's playing cards.

lordgilman 14y ago
They've changed the name, it is officially MtGox with no official acronym.
gabemart 14y ago
> Buy bitcoin at Mt.Gox the world's largest and oldest bitcoin exchange! [1] Regardless of their origins, they now use this CamelCase. In fairness, I did omit the period, inexplicably. [1] https://mtgox.com/ https://mtgox.com/
daeken 14y ago
> it stands Magic The Gathering Online Exchange, a website where you can trade children's playing cards. I'm not sure if you did it to drive the point or not, but Magic: The Gathering is by no means "for children". The average age of players is way over 18 in most areas. (Slightly biased as someone who's been playing M:TG for over 18 years.)
mikeash 14y ago
You should tell the guys at mtgox.com about this, as they appear to have this error all over their web site.

obilgic 14y ago

Speculations affect every currency or share. But it affects bitcoin stronger because of its low market cap. Think bitcoin as a some random micro cap manufacturing company located overseas, one news coverage and everything changes.

robinh 14y ago
Not only that, but MtGox handles over 80% of all bitcoin trade. No wonder it's plummeting; every currency would be greatly affected by something like that.
InclinedPlane 14y ago
Can you describe the mechanisms in the bitcoin system which will drive down the investment-based and speculation-based trading and drive up the currency-based trading? It seems to me that the exact opposite trend is more likely. The use of bitcoin as a currency will become increasingly swamped by speculative investments and the swings in value will only get larger and larger, not smaller.

DanBlake 14y ago

Is it likely the mass sell off will come once mtgox reopens? Certainly many have their bitcoins tied in there and will begin selling once open?

gabemart 14y ago
While I'm not qualified to say, I certainly would predict so. Many price-monitoring tools pull data from MtGox. For anyone using those tools, the price has been stable at $125 for the last few hours and will stay that way until the exchange reopens at whatever the price is then (currently around $65). When that jump happens, I can only imagine a vast quantity of BTC will be sold and the price will crash.

ttrreeww 14y ago

There really was no need for the hardware upgrade. The volume won't be coming back anytime soon.

akcreek 14y ago

The link in the article has BTC at $65 right now and http://realtimebitcoin.info http://realtimebitcoin.info has it at $124.90. How is that possible? Edit- It looks like http://realtimebitcoin.info http://realtimebitcoin.info is using mtgox for their data, which explains the discrepancy.

gabemart 14y ago
That site is pulling data from Mt.Gox, the largest exchange. Mt.Gox suspended trading a few hours ago, and has been showing a "last price" of $124.90 since. On other exchanges (where trading is not suspended), the price is currently hovering at $60-$65. Mt.Gox reopens at 02:00 UTC. (This comment was written at approx 22:25 UTC, so when this comment is about 3.5 hours old. When that happens, I predict, all hell will break loose.

billpg 14y ago

Is there a list of distinct URLs of Bitcoin charts, for next time the rate goes crazy?

leoh 14y ago

I'm not terribly impressed with Bitcoin. But it might be possible to make a few bucks on this downturn. "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffet

pmorici 14y ago

So I don't quite understand is the falling price because mtgox is down for maintenance (if so why does it have that effect, I don't run into the street and burn my cash just because the banks are closed on Sundays) or is that just a coincidence?

dragonwriter 14y ago
> So I don't quite understand is the falling price because mtgox is down for maintenance It had already dropped considerably (below $130, IIRC) from the ~$200 it had bounced back to from the earlier drop from $266 by the time MtGox shut down trading. The shutdown of trading at MtGox may have encouraged further decline across other markets, but it doesn't seem to be the original source of the decline. > if so why does it have that effect, I don't run into the street and burn my cash just because the banks are closed on Sundays OTOH, you might demand more dollars for goods (or just be less likely to accept them at all), or, on the other side, accept less good for dollars and be more eager to get rid of them if the main outlet for trading dollars for other currency shut down on a day that it would normally have been open (e.g., not a regular Sunday office closure) after a day of high volatility trading where the dollar had lost half its value before the trading was shutdown.
pseudonym 14y ago
MtGox is not the only exchange, although it might seem that way sometimes. It would be like your bank is closed on Sunday, but there's still banks from the same branch open next door. Because the blockchain is shared, the only thing that mtgox being down prevents you from doing is buying/selling with money stored on mtgox itself-- you can still move money from your personal wallet(s) (you're not keeping 100% of your BTC on mtgox, right?) to another exchange and sell it there.
yebyen 14y ago
Imagine what it would be like if there were bank holidays, but they are not predictable in a calendar sense in advance like our holidays... and every bank has their own list of holidays. And also there are only five banks. I think the price is falling because there's been a speculative bubble rising, and the speculators' confidence is a fickle thing. Maybe up until now, you were a speculator and you didn't think you needed to go anywhere else. Now Mt.Gox has frozen trading and they are also not processing withdrawals. Most people stop trading too. So, it's a fire sale, because nobody knows if our bubble will blow itself back up again, or how long it's going to take for that to happen. If you were keeping 2/3 of your money at Mt.Gox and now you're afraid that it's utterly gone (at least you know you won't be trading it today), so you've only got 1/3 of what you had, and everyone in town says it's worth 1/7 what it was yesterday. A few people would surely take the money and get rid of it.

krcz 14y ago

Recent research has shown that placebo works even when patient knows (s)he's getting placebo. Now it looks like the economic bubble works even when everyone knows it's a bubble: http://imgur.com/jvSKdEv http://imgur.com/jvSKdEv

illuminate 14y ago
"Recent research has shown that placebo works even when patient knows (s)he's getting placebo." Huh? Why would it be surprising that placebos work when the patient knows they're getting the placebo? http://www.ncbi.nlm.nih.gov/pubmed/20091554 http://www.ncbi.nlm.nih.gov/pubmed/20091554

PaperclipTaken 14y ago

Bitcoin is not dead, it will come back. Technically, it won't even disappear. Bitcoin has many fundamental uses as an exchange of value (note the vernacular) that is not done properly by anything else. It is the reason that markets like the Silk Road can exist. The "fundamental" flaw of bitcoin is that it is deflationary. This causes mass speculation, which causes instability. It's instability means that it is not a good store of value. It is good for exchange of value under certain conditions (anonymous, distributed, trust required, cryptographic, etc.). Bitcoin is taking a hit right now because all of the speculators are cashing out (or panicking, or whatever). Most of the people who use bitcoin for it's fundamental strengths only hold on to bitcoin briefly. This is one of the (perhaps unintended) features of the commodity. Bitcoin is not good for measuring value. You would never set a price in terms of bitcoin. You would set the price in terms of dollars or euros and then use a conversion to figure out what the price in bitcoins should be. This will probably always be the case for bitcoin transactions, because that's just how bitcoin is. But as long as bitcoin does 'distributed, anonymous, and cryptographic' better than everybody else, it will be used for those strengths, and this will keep it alive. Bitcoin is not dead until there is something to replace it. A market crash does not count. It just makes for some sad speculators.

teeja 14y ago

Back up to 82 ... end of the milking machine for today.