Are you trolling me? 

Perhaps you weren't yet reading this thread when the Bitcoinrain/MercadoBitcoin case was discussed here.

We already have "bitcoin investment" here, thank you.

Some links to get you started:
https://bitcointalk.org/index.php?topic=46750.msg556437#msg556437
https://bitcointalk.org/index.php?topic=46750.msg3607991#msg3607991
http://defendaseudinheiro.com.br/a-verdadeira-historia-do-mercadobitcoin/

AFAIK, the account balances in various national currencies that a client had at MtGOX (or at any other typical exchange) were just numbers in an internal ledger.  All trades were executed by simply changing those numbers.

The actual money that appeared to be in the clients' accounts was kept, all mixed together, in the corporate bank accounts; and the totals for each type of currency did not have to match up.  To execute a withdrawal, the proper amount was taken from a corporate account, converted to the currency that the user requested, if necessary, and wired to the customer's bank account.

In principle one could mix the bitcoins too into that common corporate assets pool, either as BTC or converted to any national currency.  That would be risky, because of possible price fluctuations; but It would not be illegal, and arguably not even unethical -- as long as the exchange kept executing the BTC  widthrawals with due speed.

Indeed, that is why I said "the loss of those coins, per se".

I think that overall it may have a negative effect, by reducing the trust in all exchanges and therefore driving people away from bitcoin.   

However, the market price seems to be determined in good part by a relatively small set of active speculators (in the tens of thousands worldwide, perhaps?) whose sentiment may be very different from that of the general public.  So, if that loss of coins somehow makes those speculators more confident, the price may go up.

Is that so? 

Surely there is efficient arbitrage between the Chinese and the Western exchanges.  And surely most of the trade there is robots.

However, trade at Huobi is falls gradually to zero by 3:00 am and slowly rises again after 5:00 am local time.  It also changes as expected during local holidays.  That would argue against robots being remotely controlled from the US, wouldn't it?  It seems more consistent with Chinese humans and human-driven robots/scripts...

I haven't been paying much attention to OKCoin, but I believe that their traffic follows the same patterns, except that there is a part of the traffic that continues nonstop through the night.   Are you referring to OKCoin specifically?

Traffic at BTC-China is weird, I do not know what is going on there.  Perhaps ONLY arbitrage against a single market-maker?

I see unicorns. All the time.

https://www.google.com.br/search?q=%22alleged+theft%22+%22cover+up%22

We have something much more interesting than a stupid semi-cow:

http://en.wikipedia.org/wiki/Saci_%28Brazilian_folklore%29

I did consider that case, I think it makes no difference:


Think of losing the keys as a theft by the Devil (or by God). 

How cool! Thanks!

Just to confuse the issue a bit more:

Consider my pet theory, namely that Mark sold those 750 kBTC of client deposits at (say) 15$ apiece off-market, when the market price was (say) 10$, without imagining that the price would increase so much, so fast.

The buyer of those coins would now be pressuring Mark to hide that deal, otherwise MtGOX clients may go to court to void the deal and recover those coins from him.  They may be floating all those rumors "I lost the keys", "the coins were stolen", "the coins were seized" --- to see which story the public will find more believable; or just to create confusion until people get bored and stop asking what really happened.

I don't think that the loss of those coins, per se, would have any effect.  

Think of the exchanges as water tanks where water represents bitcoins in the market, and the water level is the inverse price (how many BTC one can buy with one dollar).

The tanks are connected by pipes at the bottom (coin withdrawals and deposits) so the hydrostatic principle (arbitrage) keeps the water level about the same in all tanks. If one pours more water into any tank (brings more coins to the market) the level in all tanks goes up (meaning the price goes down).  The opposite happens if one takes water out of one tank (buys coins and puts them in cold storage).

If the MtGOX theft did happen, then at some point in the past, someone siphoned most of the water out of the MtGOX tank to a private barrel.  I the keys were lost, most of the water in that tank leaked out and was permanetly lost.  In either case, Mark put some bricks into the tank (hid the theft) so that people would not notice the loss, and the water level was not affected.   Then a few days ago the pipes out of that tank  were closed (withdrawals were blocked),  and the tank was disconnected and removed it from the system.   That would not affect the water level in the other tanks either.

If the theft happened, and the thief then dumped the water in other tanks (sold the coins in other markets), then there was indeed a net rise in the water level (a fall in market price); but that is past history.  

We may expect an effect only if the coins were stolen but have not been not sold yet EDIT: and are sold now.

(This analogy is imperfect because it does not model the money flows, but hopefully it is enough to argue the point.)

That would be epic..   

But I do not believe that statement, even if its indeed by Mark.  He may have written it only to buy time and hold off possible lawsuits.  Of course he could not promise to return the BTC because he has admitted that he does not have them.   I do not believe that he has the dollars either, but the world still has no information on that. 

And, characteristically, he does not give any numbers or firm dates.

The post could also be a way to manipulate markets, e. g. Bitcoinbuilder.

At this point I do not believe in any statement or revelation by anyone from the "bitcoin community", even if "proved" by PDFs or screenshots.   I do not know who is honest and who is spinning lies to cover up his own wrongdoings or moving the market.  Three months ago they were all good friends of Shrem and Karpeles...

I am afraid that the only way we may get minimally reliable information about what happened inside MtGOX is through liquidation and/or criminal investigation.

Are they? I believe that they are just different currencies that MtGOX Japan dealt with.

One must subtract the client accounts, a 400,000,000 dollar liability by prevailing rumors.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


             !    Tue !   Wed !    Thu !    Fri !    Sat !    Sun !    Mon !    Tue !    Wed !
  EXCHANGE   !  02/18 ! 02/19 !  02/20 !  02/21 !  02/22 !  02/23 !  02/24 !  02/25 !  02/26 ! Currencies considered

  BTC-e      |   8.08 |  5.84 |  23.37 |  23.64 |  18.68 |  14.24 |  20.78 |  73.86 |  33.61 | USD,EUR,RUR

  Bitstamp   |  14.83 | 20.76 |  34.97 |  29.61 |  18.08 |  20.87 |  51.84 | 115.76 |  49.11 | USD
  BitFinEx   |   8.47 |  4.71 |  25.27 |  28.46 |  14.73 |  15.80 |  27.16 |  94.55 |  37.71 | USD
  Kraken     |   0.51 |  0.38 |   1.60 |   1.15 |   1.08 |   1.06 |   1.06 |   2.23 |   1.87 | EUR
  Bitcoin.DE |   0.38 |  0.54 |   0.70 |   0.76 |   0.61 |   0.50 |   0.73 |   2.23 |   1.00 | EUR
  CaVirtEx   |   0.21 |  0.11 |   0.75 |   0.60 |   0.20 |   0.23 |   0.30 |   2.15 |   0.32 | CAD
  CampBX     |   0.10 |  0.14 |   0.73 |   0.24 |   0.26 |   0.22 |   0.37 |   0.42 |   0.36 | USD

  SUBTOTAL   |  32.58 | 32.48 |  87.39 |  84.46 |  53.64 |  52.92 | 102.24 | 291.20 | 123.98 |

  Huobi      |  74.04 | 34.12 | 131.14 | 187.12 | 154.12 | 185.15 | 163.47 | 352.76 | 250.64 | CNY
  OKCoin     |  51.46 | 26.29 |  53.49 | 140.75 |  87.71 | 141.90 |  84.03 | 275.68 | 150.41 | CNY
  BTC-China  |   3.86 |  2.04 |  10.97 |  15.23 |   9.29 |  10.42 |  13.12 |  27.72 |  14.72 | CNY
  Bter       |   0.35 |  0.37 |   0.77 |   0.63 |   0.48 |   0.62 |   0.53 |   1.10 |   0.53 | CNY

  SUBTOTAL   | 129.71 | 62.82 | 196.37 | 343.73 | 251.60 | 338.09 | 261.15 | 657.26 | 416.30 |

  TOTAL      | 162.29 | 95.30 | 283.76 | 428.19 | 305.24 | 391.01 | 363.39 | 948.46 | 540.28 |



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

NOTE: MtGOX is now closed.

I have been department chairman.  That cannot possibly be worse.

Perhaps. But right now I am kinda ejoying it.  I did't have so much attention focused on my person since sixth grade, when I was the #1 target of all bullies in the school.  It makes me feel thirteen again.

No.  And I must confess to something much worse than pontificating on bitcoin without ever having used it:

        I have served jury duty five times, all murder cases, without having murdered anyone before.

So, before I buy some bitcoin, I must fill that gap in my experience, in case I am again called to serve.  Would you volunteer?

No one knows yet the situation of MtGOX.  

According to rumors, the account balances (debts) with no cover are at least 400 million dollars.

User @twobitidiot (at reddit?) says that he sold all his bitcoins after learning of the situation. Claims that Mark approached three investors but they ran away when they began to realize the extent of the damage:

http://two-bit-idiot.tumblr.com/post/77920927310/i-retract-nothing-i-have-written-so-far-regarding-mt
http://two-bit-idiot.tumblr.com/post/77967162725/breaking-full-mt-gox-story-coming

Do you have a source for that "20 million" of assets?

Chinese Slumber Method prediction for Thursday Feb/27

This was the seventh consecutive day in a period of hectic trading at Huobi, that started on Feb/20. It is as if the seven days Feb/20--26 had been one single "trading session" during which the price veered off the trend line, like Feb/11--12, Feb/13--14, and Feb/16--17.

With these exceptionally high volumes, the volume V_h in the interval 19:00--19:59 UTC has been above 500 BTC almost every night.  By the criterion I have been using, those points should all be considered False Slumber Points and hence ignored; which would leave me with no data and hence no prediction.

Therefore I am experimenting with a different criterion, namely redefining a Slumber Point to be True if S = V_h/V_d < 0.005, where V_d is the total volume of the period 00:00--23:59 UTC of the same UTC date (08:00 am to 07:59 am local time).

This change only affects the classification of a few Slumber Points. In particular, Feb/24 and Feb/25, which I had classified as False before, now are classified as True.  For today Feb/26, Huobi's volume V_h was 1305 BTC, and the daily volume V_d was 250.64 kBTC, giving S = 5.21 --- hence a False Slumber Point.

Now there is a clear but strongly "bearish" trend defined by the last three True points, Feb/23--25, skipping Feb/26.  The equation is p = 9881.67 - 263*d, where p is the price and d is the day number in February  It seems too pessimistic, but rules are rules and traight lines are straight lines, so:

Prediction valid for: Thursday 2014-02-27, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 2781 CNY.
Bitstamp's predicted price: 454 USD.

For Bitstamp, as usual, I used Huobi's prediction divided by R = 6.12.

For those who prefer a bullish prediction, I can also ignore the Feb/24 and Feb/25 points, and instead extrapolate the old trendline (which began on Feb/10, and appears to be a shifted slowly decaying exponential):

Huobi's alternate predicted price: 3802 CNY.
Bitstamp's alternate predicted price: 621 USD.

In the following chart, the bearish trendline and prediction are in orange and strong blue, whereas the bullish one is in olive-gray and light blue.


NOTE: Don't get excited yet.  The value "20,000" next to the blue rectangle belongs to the scale of the volume plot, not of the price plot.

Checking the Chinese Slumber Method predictions for Feb/26

Prediction posted on: Wednesday 2014-02-26, 03:47 UTC
Prediction was valid for: Wednesday 2014-02-26, 19:00--19:59 UTC

Well, I am tired of being the only bull in this thread

Huobi's predicted price: 3804 CNY
Huobi's actual price (L+H)/2: 3543 CNY
Error: 261 CNY

Bitstamp's predicted price: 622 USD
Bitstamp's actual price (L+H)/2: 589 USD
Error:  33 USD

The price ratio between Huobi and Bitstamp returned to near the normal value R = 6.12 (actually a bit lower, closer to 6.00).  It seems that arbitrage trading has been restored.

The Huobi prediction in question is the rightmost blue rectangle on the chart below.  The light blue-gray rectangles are the previous predictions.  The orange and grey dots are the True and False Slumber Points, the mean Huobi prices at 19:00 UTC every day.  The orange line is the trend that was assumed for the prediction.


The following chart shows the Bitstamp prices and predictions. The orange and grey dots are Huobi's prices at 19:00 UTC every day, divided by R = 6.12.  The orange line is the trend used in the prediction, which is Huobi's trend divided by R.