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I had no idea that they were sitting on such a large stash of bitcoins (from the article, 250K). This leads me to believe that they have been trading on their

by 1053r 13y ago

I had no idea that they were sitting on such a large stash of bitcoins (from the article, 250K). This leads me to believe that they have been trading on their own exchange to keep the USD / BTC price depressed. For example, if the "market" decided that there was a 50% chance Mt. Gox was never going to solve their banking problems and allow unlimited fiat withdrawals, then you would expect there to be a 100% price premium for BTC on Mt. Gox. However, that would send a VERY scary message in terms of their viability, which would quickly become a self fulfilling prophecy, so Gox could sell some of their stash to keep the price premium to say, 10%. If they tried to push it all the way down to a 0% premium, though, they would quickly run through all their BTC. Since the price premium has been stable at almost exactly 10% for months, that suggests SOMEONE is manipulating it, probably to keep it low. Does anyone care to look in the blockchain and do the deobfuscation to see if my theory is correct?

ihsw 13y ago
There is value to BTC price stability, and it definitely isn't surprising considering a stable BTC price supports MtGox's bottom line.
- ISL 13y ago
  One could argue that efficient price discovery supports MtGox's bottom line. If bitcoin ends as a currency, it looks like MtGox would be left holding the bag. Healthy exchanges should make money by facilitating transactions, not price support. Of course, if MtGox wanted to underwrite a bitcoin community and then reap the future benefits as a major exchange, this is an efficient way to do it.
  - drcross 13y ago
    |if MtGox wanted to underwrite a bitcoin community and then reap the future benefits as a major exchange, this is an efficient way to do it. wrong, the most efficient way would have been to offer discounts on their rates. That's the main clue that MtGox are not partaking in price manipulation.

by 1053r 13y ago

ihsw 13y ago

There is value to BTC price stability, and it definitely isn't surprising considering a stable BTC price supports MtGox's bottom line.

ISL 13y ago
One could argue that efficient price discovery supports MtGox's bottom line. If bitcoin ends as a currency, it looks like MtGox would be left holding the bag. Healthy exchanges should make money by facilitating transactions, not price support. Of course, if MtGox wanted to underwrite a bitcoin community and then reap the future benefits as a major exchange, this is an efficient way to do it.
- drcross 13y ago
  |if MtGox wanted to underwrite a bitcoin community and then reap the future benefits as a major exchange, this is an efficient way to do it. wrong, the most efficient way would have been to offer discounts on their rates. That's the main clue that MtGox are not partaking in price manipulation.