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Comment by buro9 | Hacker News Reader

It will be savaged when it comes back online, on some of the other exchanges bitcoin is down to $66 : https://btc-e.com/

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I wonder how much of bitcoin's run-up has been due to fraud on MtGox where market manipulators make specific small up-tick buy/sell transactions - that are always moving the price up.

Now with MtGox out of the picture, the real demand and supply are meeting.

That only works if the honest participants are naively placing market orders and paying zero attention to volume.

A thinly traded market is at least a great place to try it.

> That only works if the honest participants are naively placing market orders and paying zero attention to volume.

Doesn't that describe the bitcoin market exactly to a T?

I mean, I really don't care what the volume or price is - if I'm buying coins to spend on SilkRoad that day. Which BTW, bootstraped Bitcoin from zero to 30 at least, and probably makes up 15-35% of the real demand (real value) for it to this day (with the other major fraction being gambling sites)!

Nor do any of the get-in-quick-on-this-new-thing speculators that buy after reading the latest bitcoin article.

And this all fits the fact that when the major EX closes, prices go down drastically on all the other smaller EXs. They should be going up instead for obvious reasons (with such hot demand)! But they go down! Explain that one to me please.

I think the difficulty of moving dollars in and out of the various exchanges makes it risky to draw much conclusions about which way things should go when Mt. Gox is down (A vaguely reasonable explanation would be that people get a little more sell happy on bad news, with a limited supply of dollars looking to buy).

My intent was a little sardonic though.

As it happens, I did that calculation last night: If SR facilitates $70K per day of business and funds are escrowed for 5 days, that’s $350K in escrow at any moment; dividing by 11M BTC gives a value of around 3 cents/BTC. I don't think there's any way to get $30 from there.

That's too simplistic of a calculation. How many bitcoins are being stored on SR addresses? How many bitcoins are sold by the sellers on SR? etc.

The notion that SR is responsible for 2-3 cents of bitcoins run-up in the last 2 years ... something not right about that figure.

Market panic explains it all pretty nicely without need to resort to any sort of conspiracy theory.

What panic? Panic about an EX being down for a day? That's not panic. Thats an EX being down for a day or two.

Market panic is something else entirely.

http://en.wikipedia.org/wiki/Panic_of_1907

"Market panic is something else entirely."

Because? Your evidence for conspiracy versus what we're observing is far less convincing.

Speaking of which, I hear that the Silk Road may still be setting prices based on the Mt Gox rate.

They are still exchanging at $156.5 USD to 1 BC at the moment. Not sure how many orders are going to be canceled by the sellers.

You can forge high-volume transactions when those high-profile market manipulators play with collusion.

This seems like a bit of a stretch to me, absent other information. Why do you suspect mtgox has been manipulating the exchange rate (or at least providing an exchange on which to do so).

No, I did not say MtGox was manipulating the market, but people with accounts there were.

See my further comment in this thread.

Also note that fraud (all forms of it), the criminal element, and everything bitcoin related is not exactly too far apart from each other on any given day.

The real price would probably be much higher right now, if people had the money. A lot of them have money deposited on MtGox, and they can't quickly transfer it to other exchanges, so there's a lot of BTC supply, but not a lot of USD supply (in forex, there's supply-supply, not demand-supply, if you can call BTC forex).

https://vircurex.com/ is also lower at $65 for bids.

No doubt this is the REAL test of Bitcoin. I can see if hitting $30 again to bottom out.

It's bouncing around all over the place, between about $70 and $110, but then it seems to be one of the few exchanges still in operation - bitstamp seems to have disappeared off the net too.

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