Bitcoin Crashes 25% As Mt.Gox Halts Withdrawals

Tyler Durden's picture

Mt.Gox, the largest exchange for the online digital currency, was forced to halt withdrawals (but not trading) this morning. Due to an increase in withdrawal requests the exchange's systems had technical problems and in order "to understand the issue thoroughly, the system must be in static state," they reported. The exchange said it would resolve the problem as soon as possible and "apologize[d] for the sudden short notice." Interestingly this seemed to rapidly remove Mt.Gox's modest premium to the other exchanges and bring them all back inline around $700 as the price recovered.




As Max Pelham noted (Coinwatch),

"People will be leaving Mt. Gox either way, the trust isn't already very high, and with this now people are going to trust them even less,"


"I think Mt. Gox is going to lose relevance even more now, they're not very forthcoming in their public relations, their technical problems and their withdrawal problems aren't going away. Even if they fix it now, the withdrawal problem still remains with USD and Euro withdrawals."


Source: Bitcoinwisdom

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glaucon was right's picture

I hope everyone likes tulips

InjectTheVenom's picture

yawn.    btfd.    wake me up @BTC $950 (again)

wallstreetaposteriori's picture

That creamy feeling Fonestar was talking about yesterday was him definetly watching his "net worth" vanish into bitcoin abyss.

THX 1178's picture

How could anyone possibly think the govt/police states of the world will allow transactions in bitcoin after the crash. It threatens their power and dominance and therefore will not be allowed to be used in trade. Of course it will not be illegal to HOLD them only to SPEND them.

Boris Alatovkrap's picture

When intrinsic value = nothing, trust = everything. Proceed at own peril.

fonestar's picture

Bitcoin could go to $500. 

fonestar does not care.

quintago's picture

Surprise Surprise. Like I said before...would you rather have an oz of gold for ~$1K, or a fairy tale currency? Easy answer to that one, even if BTC were $250.

Reality is ....we already have one fantasy land currency, we don't need two.

Doña K's picture

If that's not an inside job, what is?

Bitcoin is controlled just like getting large cash withdrawls from the bank. 

fonestar's picture

Bitcoin is controlled... by the sum total of all buyers and sellers of Bitcoin on the various exchanges.

nuclearsquid's picture

Ha! Yeah this is normal price discovery. 


fonestar's picture

Correct.  This is what price discovery looks like on thinly traded markets.

Lugnut's picture

So the largest exchange in a thinly traded market can't handle what should be nominal withdrawl requests.

I'm shocked to hear that Bitcoin hasn't proven itself to be a stabile effective medium for monetary exchange.

max2205's picture

No hope unless the irs starts taking btc

SF beatnik's picture

Criswell predicts:  


1) Mt.Gox is profoundly fucked and will soon go down.  


2) Bitcoin will be displaced by some new altcoin(s) of 

far more advanced design. 


3) new exchanges will suffer the risks of accepting credit card and Paypal deposits as this is absolutely necessary for altcoinage to go mainstream and for the long term success of any exchange


The FT article discussed in zerohedge, yesterday, might be right:  the big boys might use altcoin to go all electronic, and thus to keep tabs on your every purchase of alcohol, cigarettes, candy, bullets, books by Noam Chomsky....

Groundhog Day's picture

if I had listened to fonestar last week i would be 25% poorer with limited withdrawal capacity....i'll stick to precious metals.  When i lose 25% their at least i know i have them

fonestar's picture

Again, you have no clue what your talking about.  It's the same blockhain whether you trade at Mt.Gox, BTC-E or BTC China.  And if a measely 25% pullback (it wasn't even that on BTC-E) makes you shit your pants you shouldn't be in Bitcoin to begin with.

nmewn's picture

My, how times change.

One week its "the honest currency", reliant on ( & encryption) the people for its value. The next, you're advising people that 7-25% swings in dollar price are perfectly normal for BitCoin.

Currency is supposed to be stable (at least, short term) so goods & services...that is, buyers & sellers can clear their transactions and neither side ever thinks they got hoodooed. And again, real money relies on nothing but itself, for a trusting, honest exchange.

Any other black magic currency advice you'd like to give the ZH crowd, who've seen all this bullshit before or was this investment advice all along? ;-)

fonestar's picture

Bitcoin was $792 last night on BTC-E.  Now it is $737.  Um...... 25% ???????  Seems more like 7% to fonestar.

Does not compute.

codyave's picture

all money spent on bitcoin is burned money. such is bitcoin life.

codyave's picture

all money spent on bitcoin is burned money. such is bitcoin life.


edit: double reply

HyBrasilian's picture

Bitcoin is controlled... by the sum total of all buyers and sellers of Bitcoin on the various exchanges.


So explain to me how, in practice, that differs from anyone 'controlling' the paper price of Au or Ag by way of 'flooding' an exchange with leverage & naked option contracts? [other than HOPE that the 'total sum' you refer to is actually individuals using incremental buy/sell orders, versus one large player who has a large stash of bitcoins scattered over thousands of dummy accounts]?

IOW ~ How do you know that, Winklevoss, for example, hasn't scattered his holdings into 10,'s of thousands of smaller wallets? [or some such scenario]

How do you know that JPM/Blythe haven't already set up & funded a couple of million wallets of very small sizes, [making them look like 'mini-fonestars'], and can thus trigger massive moves at will?

The fact is, you don't know. I mean, fuck, if an idiot like me can think up such a scheme, what do you imagine the criminals have thought of?




fonestar's picture

There are no markets for Au and Ag.  There are paper contracts for Au and Ag that allow them to be naked shorted.  I think the difference should be pretty clear for anyone with a two-digit IQ.  Not going to waste time on this.

HyBrasilian's picture

It's because you don't have a viable answer...


The plain fuck fact of the matter is that bitcoin is treated as a 'commodity' [posing as a currency]... & it will be this way until it DROPS it's association with the DOLLAR [or any other fiat currency]... If the dollar goes bye bye tomorrow, not one person will have the slightest fucking idea of what a bitcoin is supposedly worth... Mostly because it has no attachment to LABOR...

Hell ~ it's 'priced' in dollars as we speak [and still can't settle at finding a rightful value save for the wranglings of buyers & sellers who resemble POKEMON CARD, or BEANIE BABY, or TULIP traders]...

Since you're not going to 'waste your time' answering my question [because you don't have an answer], I'll answer it for you... You have NO FUCKING WAY IN THE WORLD of knowing, say, in the past year [& because of the relatively low TOTAL value of the bitcoin market], that central banks, worldwide, haven't already set up millions of small dummy accounts, and funded them with printed dollars [not unlike the billions of $100, on pallettes, dropped into Iraq]...

Maybe that hasn't happened... But just the idea that it could be that fucking easy to overrun this piss puddle market ought to tell anyone all they need to know...

fonestar's picture

There are very few Bitcoins being offered at market.  Most are hoarded or already lost forever.  I've already given you your answer and the fact that you refer to Au and Ag "markets" (as if they were legitimate) just highlights your ignorance.

HyBrasilian's picture

Mt Gox is not a "market"?... Please tell me what it is then... & don't tell me it's a fucking 'EXCHANGE' [because an 'EXCHANGE' is a 'MARKET' ~ where price discovery is made [manipulated or not].

fonestar's picture

More like MtGox was a market.  It's less and less relevant each passing day.

fonestar has never even traded there.

DoChenRollingBearing's picture

I never bought/sold at Mt Gox either.  Mt Gox always had a high premium (higher $ price for BTC) vs. the other guys, I do not know why.  I just used some of my BTC to buy some gold, will do so again before long.


1:35 PM US ET: BTC has partly clawed back its losses:


Saro's picture

Mt Gox does not allow withdrawals in USD after their bank accounts in the US got seized by the feds.

Therefore, if you have USD in an Mt Gox account, the only way to withdraw that would be to buy BTC on the market with it and then transfer the BTC out.  This buying pressure caused the price of BTC on Mt Gox to be higher than other markets.

HyBrasilian's picture

Well now THAT'S reassuring!... In any case, my simple point [above], is that this is a *MARKET* [which is confirmed by the various responses]... As such, my point in comparing that characteristic of it to Au & Ag [which fonestar tried to refute], is invalid...

fonestar's picture

I just told you there are no markets for Au and Ag.  What part of that did you not fucking understand?

HyBrasilian's picture

Well then, I'll be sure to relay that message to my local CS merchant... He'll be happy that you put him out of business & that he NO LONGER has to annoyingly check 'SPOT PRICES', by computer, to transact over the counter with customers...

fonestar's picture

When I see an international warehouse where I can put some physical ASE,  Maples, Buffaloes, whatever on the table, walk away with cash and that is how the price is set, then and only then will I accept there is a price for Au and Ag.

HyBrasilian's picture

Yeah ~ I fucking guess...


I remember last APRIL, [when BTC was doing it's first 'flurry' to up around 2 bills & a half]... The MOST LAUGHABLE thing is that you were:

- PUBLICLY BRAGGING [on an open internet forum]

- about your 'PROFITS' on the BTC wave

- right around TAX TIME [April 15]

Nevermind that...

What was EVEN MORE HILARIOUS is that AFTER BTC peaked & crashed, you were bragging about how you were 'diversified' [& thereby running all your money into Ag ~ when it was still north of $30]...

EVERY step of the way, all your input would be construed [by any obserever], as being zealous speculator [spliced with the occasional techno babble justification that others simply didn't understand how ADVANCED you were]...




If you're such a bitcoin GOD... Why the fuck aren't you out driving your LAMBO right now picking up pussy instead of wasting your time with us?...


How the fuck many BITCOINS does it take to move out of your mothers basement for chrissakes?

Pickleton's picture

There are very few Bitcoins being offered at market.

Just curious, if my local coin stores sell 'very few' coins, then isn't that a market?  It apparently is for Bitcoin.  If not, why not?

HyBrasilian's picture

If you're paying attention, fonestar AVOIDED my previous question...


The fact of the matter is that BITCOIN is, in fact, a 'market' [just like gold, silver, orange juice, pork bellies, or even other fiat currencies]... It '*HAPPENS* to also have found a niche as being accepted as a currency...

The *MARKET* characteristic is 1000x more compelling [which is evidenced by the numerous thread bytes dedicated to PRICE FLUCTUATIONS ~ versus the relatively few & uninteresting details about which comic books & pizzas fonestar bought last week using bitcoins]

The *EVEN MORE* compelling fact is that, as a market, it is subject to the same whims, [as I've hypothesized above & below], as any other MARKET by some entity with a dedicated [& possibily criminal] interest in doing so...

Pickleton's picture

I'm paying attention. I was attempting to Capt Kirk his Nomad

fonestar's picture

Your post was stupid (and the answers are obvious).  Too much stupidity here on the subject of Bitcoin, take a number fonestar has only so much time.

Pickleton's picture

Was my post that you whisked right by stupid or did you just not have an answer that doesn't indicate you're an imbecile?

Toolshed's picture

Foneystar destroys his own arguments with alarming regularity. Pretty hilarious.

zulu14's picture

Bitcoin gets it's value from the number of people using it's network.  The more people using it, the more valuable it is.

I'm holding & BTFD


HyBrasilian's picture

Bitcoin gets it's value from the number of people using it's network.


WONDERFUL! ~ Then I'm going to be Jamie Dimon & Lloyd Blankfein... I'm going to have the FED print me $20 billion dollars [about a weeks worth of QE]... Then I'm going to have some pimply faced MIT interns set up 100 million accounts [satisfying my number of people problem], & I'm going to fund them all by incrementally buying, at market, anonymous bitcoin wallets, coming from all parts of the world... all for small amounts ranging from .25 BTC to 1 BTC... [&/or in a way that nobody sees me as a WHALE]...

Then ~ in a manner similar to HFT algos, I'll periodically send a 'jolt' through the market by firing off random sequences of buy and sell from various configurations of accounts...


When fonestar explains to me, in all his geek fueled wisdom, how a scenario like that [or a dozen 'others' that I could probably think of off the top of my head ~ & mostly having to do with the relative *LACK OF* of size of the bitcoin market, to which he himself has acknowledged that MOST of it is CRYPTO INERT ~ VERSUS:

- The MASSIVE amount of otherwise COUNTERFIAT money that is floating around the planet

- The ease at which its printers can control the supply

- Their intentions in doing so [in order to perpetuate the franchise for as long as possible ~ which include: mass murder & genocide of people who supposedly belong to their own tribe, for the effect of mass 'generational' propaganda ~ & which manifestly are known as WORLD WARS], & basically, otherwise, whatever OTHER means possible that haven't even been practiced yet.

- Their [formerly conspiracy THEORY], cum lately [conspiracy FACT] admissions of controlling EVERY market from LIBOR, to precious metals, to energy, to weather, to fucking earthquakes for chrissakes

- The idea that they would DRAW THE LINE at bitcoin... &, in a sense, NOT GO THERE because of their fear of being taken down by fonestar & his hotpockets, comic book, star trek convention crew


Jesus tapdancing Christ...


The ball is in your court fonestar... Explain to me how NONE of that could ever happen... Because if it can't be proven, than it makes more sense to invest in a bowl of spaghetti than to waste time with bitcoins...

TheHound73's picture

I'm not sure I understand your argument: because BTC can be manipulated like gold can, they both suck?

Basically the only advantage in this regard is that taking delivery of BTC is a trivial process provided by the  Bitcoin network and blockchain.  Making paper claims on bitcoins doesn't make much sense and incurs an overhead. In relation to the current article, until they fix their redemption issues, all the trading currently taking place on Mt.Gox is paper trading.

e_goldstein's picture

Bullshit. The "market" for Au and Ag occurs when a buyer and a seller get together and exchange a set amount of a tangible good for an agreed upon price. The only difference between that and a bitcoin transaction is that there is an actual tangible good being exchanged and not a string of numbers that is dependent on the ether for its existence.

Futures markets shouldn't be considered markets anymore, and should probably be renamed, since their primary reason for existence--price discovery--has been made invalid by large actor price manipulation.

fonestar's picture

So if it shouldn't be included why do gold & silver buyers and sellers keep looking at the COMEX price then?

e_goldstein's picture

Force of habit and/or ignorance.


Boris Alatovkrap's picture

Genius of BitCoin is mathematical limit of number of coin, so value cannot be dilution. Of course, intrinsic value = 0, so dilution of zero is not consequential.

Crash Overide's picture

Bitcoins dilution is in decimal points...

HyBrasilian's picture

Bitcoins dilution is in decimal points...


That's reassuring!

Because Jane 'Mainstreet' Housewife was simply WAITING for the moment that she could go to the local A&P, check the discount values on volumes of 28oz of tomato sauce cans, & CONFIDENTLY understand how to VALUE SHOP by pulling out her '.000000324768327469' ... OH WAIT ''.0000003247684686745' ... OH WAIT ''.0000003247683353456' crypto wallet to make the purchase...

I can see BILLIONS of converts in 5...4...3...2...

Shopping Cart SPRINT lineup is going to replace NASCAR as the hottest spectator sport at WALMART...