35 votes

Update: Bitcoin loses 50%, what next?; Trading Halted

Is this another flash crash versus a true pump-and-dump?
Trading halted for upgrades 4/11/2013 11:16:
http://www.zerohedge.com/news/2013-04-11/bitcoin-halted
ZeroHedge: BitCrash Continues: Down 40% And Dumping | 4-10-13
Update - see new chart at link -50%

http://www.zerohedge.com/sites/default/files/images/user5/im...

Time to rename it BitCrash... or will it stage an amazing recovery? Alas, for this particular bubble, there are no NYSE circuit breakers nor is there a Federal Reserve-mandated "plunge protection team." And why should there be? The central banks hate all currency alternatives. Firehats: on, especially since the volume is still relatively light.

See second chart at:
http://www.zerohedge.com/news/2013-04-10/bitcrash-continues-...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Econ 101. It's called profit taking.

Sell high and buy low is how to create wealth.

If you believe the price is peaking then sell.

Free includes debt-free!

That's not...

what MtGox is claiming. They are claiming that website lagginess caused a panic. Why would a slow website indicate price peaking especially when a supposed tidal wave of new bitcoiners is incoming?

A mass influx of new bitcoiners logically should be interpreted as a wave of new and increased demand (higher prices) and create an impulse to maintain accumulated bitcoins.

I'm looking for reasons (even theoretical ones) for this to occur:

"Oh no!!! MtGox is being slow! Sell! Sell! Sell! :( "

.
~wobbles but doesn't fall down~

Indeed.

Laggyness on the exchange should not cause a panic selloff. I think it's far more likely that the website got laggy once a panic selloff was already underway, at which point they decided to close either because (a) they genuinely could not handle the number of (predominantly sell) orders coming in, or (b) they (like every other financial exchange in the world) didn't want to see a total route, as that's bad for business. Probably some of both.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Yeah, I know. Are they telling the whole truth?

My experience with humans suggest that telling the whole truth is the exception rather that the rule.

The rules of the MSM makes truth telling an accident.

The ability to send data, potentially autonomously, worldwide has value. The more threatening government tyranny becomes, the greater the value of valid crypto-currencies.

Only government intervention makes bitcoin a necessity.

In a truly free market someone could offer that global, private service for a price.

That free market is probably twenty years off if we are lucky. The battles for Independence from Britain took 20 years and this tyrannical foe is willing to act immorally to maintain its illegal control.

Free includes debt-free!

I'll tell you...

The Bitcoin market has recently been fueled by greed, and as I said below, people buying that don't fully understand it.

If you look at the bitcoin price chart you will see it shot up steeply in a short period of time. That led to talk it was a bubble.

Things grew so hot that Mt.Gox, the largest exchange, could not handle the large influx of new users and trades which was increasing exponentially.

With Bitcoin there is always lots of opinions, conspiracies, misinformation, etc. floating around at any given time. So when Mt.Gox got a trade hiccup people started speculating it was time to sell, because something might be wrong, or the bubble was popping, or who knows what, but bottom line was the ingredients were right for a price crash. And that's what happened.

If bitcoin investors...

...were optimistic about bitcoin's future, and knew that Mt Gox membership was growing rapidly, why would they interpret laggyness as a sign to sell? Wouldn't it be just as (more?) reasonable, from their perspective, to see it as a bullish sign? "OMFG, so many people are buying that the exchange crashed, cyber high-five!"

?

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Offers rpcongress...

some acai/pomegranate/blueberry green tea.

*sip* :>

.
~wobbles but doesn't fall down~

read

http://www.dailypaul.com/281462/bitcoin-volatility-caused-by...

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

I read it...

but it doesn't proffer a reason or model why website slowness would cause people to think prices might start suddenly dropping inciting a panic selloff. All it does is provide a "just so" story.

I still don't see how website lagginess would cause a panic sell. :p

.
~wobbles but doesn't fall down~

Good question

The reason, I believe, is because there are so many new people rushing into Bitcoin because it's the most hyped/hot thing right now, even though they don't fully understand it.

I've been around Bitcoin since December 2010, before the price even broke $1, and I'm STILL learning things about it. There is no way all the people buying into Bitcoin now really understand and have faith in what they are buying. So, when something seems to go wrong you can get a panic sell, which was especially likely because the price shot up so fast - nothing goes straight up, nothing.

Some truth there.

"there are so many new people rushing into Bitcoin because it's the most hyped/hot thing right now"

Yep.

"they don't fully understand it."

Yep.

...reminds me of housing and dotcoms, or any of the pump and dump dogs on the pinksheet.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

What about...

the half dozen other times in the past few weeks the following has happened:

1) exchange price rapidly crashes 20-25%
2) MtGox and Bitcoincharts both go offline/display server errors for an hour or so
3) MtGox and Bitcoincharts come back online and the price recovers to pre-crash levels within an hour so

At what point does a person scratch their chin with a puzzled look and think, "Hmmm, this cannot be natural"? (in other words, MtGox is price-fixing)

**over 80% of all bitcoin transactions occur on MtGox

.
~wobbles but doesn't fall down~

yes you are right...

Its awful that mtgox have so much market control... this is making people leave mtgox.

Everything that is happening right now is only strengthening the bitcoin economy..

but you keep coming to unfounded conclusions:
================>}]>

You have no proof in any of your claims other than your own conspiracy logic...

========>}}>

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

According to...

MtGox "terms of service" (their contract with you), buyer's and seller's offers and bids are supposed to determine the exchange price. MtGox is just a service provider that facilitates third parties agreeing on price.

If MtGox is monkeying with the exchange price (and the forensic evidence and data STRONGLY suggests they are) then they are violating their own published contract, are engaging in fraud and theft, and are breaking the law.

Ron Paul says that one of the few valid roles of govt is contract enforcement and prosecution of fraud...

.
~wobbles but doesn't fall down~

read

my comment below

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

halt due to upgrade my arse

Its to easy to ddos everything involved. Trust me that whats going on.

Ron Paul 2012!

Why should I trust you?

?

Free includes debt-free!

SteveMT's picture

BitCoin Trading Halted, Posted: 4/11/2013 11:16

Posted: 4/11/2013 11:16

Yes, it is supposedly distributed, but that does not prevent BTC trading platform MtGox from halting trading for a bit, or 12 hours as the case may be.
http://www.zerohedge.com/news/2013-04-11/bitcoin-halted

Mt.Gox

is not the only exchange (although they are the biggest), see here:

https://en.bitcoin.it/wiki/Trade#Currency_exchanges

F*ck MtGox...

There are many other exchange companies in the world just to name a few:

BitStamp, CoinCase, BitFloor, Campbx, BCT-E, cavirtex, worldbitcoinexchang,bitinnovate, vircurex... and the list goes on...

People are leaving mtgox... especially seasoned bitcoiners:

https://bitcointalk.org/index.php?topic=172991.0

its ridiculous that one single exchange company have so much influence.. I have never used and exchange company, nor do I think I ever will. This is a P2P technology and intermediaries are not even necessary.

If you are a newbie and need to use an exchange company okay do it... but please not mtgox...

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

Good point. Better that

Good point. Better that people offer to buy/sell their coins from/to other individuals directly. Which is the whole point.

Check this out!

A Decentralized Exchange company:

https://ripple.com/

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

Why...

are ALL of the next five largest exchange's price lagging MtGox by almost exactly 30% each?

http://bitcoincharts.com/markets/currency/USD.html

HINT: MtGox price-fixing scheme that was successful the last half dozen crashes in the past few weeks is showing weakness. So they've called a "banking holiday". Bitcoin has its own PPT (plunge protection team)

Ahh at the smell of fraud in the morning.... :)

.
~wobbles but doesn't fall down~

weebles

some of your comments are entertaining, I'll give you that.

The reason all exchanges (and pretty much everyone else in bitcoinland) follow whatever price is on MtGox is because they are by far the largest Bitcoin exchange.

Also, note that in Bitcoin nobody has to ask anybody permission for anything. If you want to make a better exchange (or other bitcoin business) do it! We can never have too many exchanges.

You said...

"The reason all exchanges (and pretty much everyone else in bitcoinland) follow whatever price is on MtGox is because they are by far the largest Bitcoin exchange."

I am pointing out that the next five largest exchanges after MtGox have BROKEN AWAY from MtGox's price. And they've all broken away in nearly an identical amount.

There is a growing mountain of statistical data that shows something is just not right and is not in any way natural behavior.

Granted I may not be able to name names yet, but the forensic indirect evidence is getting extremely hard to ignore...

.
~wobbles but doesn't fall down~

Hmm

Actually I just checked and prices are all over the place, which makes sense to me because the whole system is out of whack due to the panic sell. Prices will settle within close range of MtGox again after a while.

Current prices at time of post:

MtGox: $123.40
BitStamp: $70.00
BTC-e: $85.60
CampBX: $90.00

Heh...

I just refreshed the chart and all the major competitors are down in the 70's and 80's.. in tandem.

http://bitcoincharts.com/markets/currency/USD.html

80
76
80.51
83
78

Of course, MtGox is still at 124. Because they are closed...

.
~wobbles but doesn't fall down~

Ouch...

now they are down in the 60's and 70's... :\

.
~wobbles but doesn't fall down~

Yeah

That's why there is the famous Warren Buffet line:

"Be fearful when others are greedy and greedy when others are fearful."

Now...

down in the 50's and 60's :\

.
~wobbles but doesn't fall down~