Bitcoin -90

So Dow's drop was 4x that of Bitcoin.  Can't argue with that.

Rats, did I forget again to put the ""?

Indeed, the resemblance is striking:
BTC:USD, 1 year
Dow-Jones Industrial Average, 1 year

Never said they are frauds.  Unlike my "plan", I am sure that everything was clearly spelled out in the prospectus, and investors were fully aware of the risks.

I would rather guess the steady state before the Oct/2013 bubble, namely ~120 USD/BTC.

OK, sorry, I did not mean that.  The point is that the money that went into SM will not come out again.  Wouldn't it be like this project of mine?

Roger Ver, Charlie Shrem, Josh Garza… Why didn't they invite also Mark Karpeles, Ross Ulbricht, Danny Brewster, Jon Montroll, Josh Zipkin, Sonny Vleisides?  

That means, there will be no redemptions: investors will have to find other investors in order to cash out.  Correct?

Well, BitPay sells a lot through exchanges like Bitstamp and Kraken:

http://www.walletexplorer.com/wallet/BitPay.com

2015-01-12 21:21:37  -500.  Kraken.com
2015-01-12 21:12:22  -500.  unidentified wallet [44eaace4eb]
2015-01-07 19:14:24  -900.  Unidentified wallet [00a5eacf79]
2015-01-06 03:18:47  -300.  Kraken.com
2015-01-06 03:18:47 -1000.  Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19  -500.  Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19  -200.  Kraken.com

If you keep scrolling those pages you will see similar payments to Bitstamp (before the hack).

I haven't looked into the Coinbase wallet (available at the same site).


That [44eaace4eb] wallet may be some private whale, but may also be some part of an exchange's input wallet that the site has not yet identified as such.

If the OTC market price was higher than the exchanges, then why would they sell at the exchanges at all?

For lots of 500 and 1000 BTC, the OTC price cannot be much different than the open market price, since a broker could easily buy or sell that amount in the exchanges and make a lot of money from arbitrage in the OTC market.

Is there a set date for SMBIT to re-enable redemptions?

I bet that 25 million bitcoins would be promptly made available for the occasion, with the full blessing of Patriarch Gavin. 

The US government announces plans to buy 25 million bitcoins over the next 3 months.

Actually I did not come across right in my posting.

I believe that the Chinese government may care about what is going on inside the exchanges, and may still crush them harder, if it turns out that they have been grossly scamming their clients, or if they try to do that in the future.  Like that exchange that went poof a year or so ago, whose owners were chased down and jailed.  

For that to happen, I belive that several rich clients would have to lose lots of money at once.   Or the exchanges try to cheat the government about taxes, money laundering, etc. However, if the exchanges are "only" slowly bleeding the small clients, by front-running, manipulating the price for pump-and-dump rides, or faking their numbers, I don't think that the government will care.

Was he referring to bitstamp? Or to the current crash?

I saw that, yes.  Pretty interesting, thanks for posting.

They don't do that, actually.  When they sell a 100$ item 'paid with bitcoin', they just get 100 dollars in their bank account.  That is why it is so easy to convince them to 'accept bitcoin'.  It is the payment processor's job to handle the bitcoin and convert it to dollars. 

Bitpay and Coinbase must have been running into huge losses with the recent price drops: they must accept bitcoins as if they were worth the current market price, but can only sell them hours later on Bitstamp. 

And the irony is that they sold only 50'000 of the 145'000 coins in the last auction because they did not want to disturb the market too much.

Since the Nov/2013 bubble I saw only two articles where the reporter actually bothered to find out who were the Chinese who created it by buying all those coins.  Not in the bitcoin media, of course. (The most informative one was in the Christian Science Monitor, of all places.)  

The Chinese who have been setting the price of bitcoin were day-trading funny commodities before, as a form of gambling.  They just moved to a new asset that was a lot more volatile, and did not have complicating isssues like quality grades, location, shelf time, etc. (all hail to 'fungibility').

So, my guess is that the Chinese government does not care anymore about what happens on the exchanges, because it is no different than what was happening before bitcoin, with the speculation in those commodities.

The PBoC does not care any more, because bitcoin trading is confined to the exchanges, and cannot interfere with the role of the yuan in e-commece and with the banking and financial sectors -- which is what they care about.  Some other parts of the government were concerned with criminal use of bitcoin, but the exchanges got scared into fully cooperating with the police through AML/KYC.  I believe that they also got a scolding from some other sector of the government about their attempts to market bitcoin to the masses, so they pulled back on that too -- no more sponsoring of bitcoin conferences, and no more open houses featuring the Bitcoin Goddess.

In short, the Chinese government must now be worried about the fairness of bitcoin exchanges to the same degree that they worry about the fairness of the casino tables in Macau.  That is, not at all.

Good for you then.  But I am thinking of those SMBIT investors who wanted to redeem after the lock-up.  Thank Goddess they had a benevolent Authority to protect them from their own weaknesses.

But no problem, I am sure that, if and when SMBIT again allows redemptions, they will offer to redeem the shares according to the price on 2014-10-28 (355 USD/BTC).

Never invest more than what your creditors can squeeze out of your skin later.