Bitcoin Flash Crashes, Drops By 80% In Seconds

Tyler Durden's picture




 

Now that Bitcoin exchange Mt.Gox has terminally discredited itself following the latest, and likely last, withdrawal halt announced late last week which sent the value of Bitcoin tumbling by 25%, Bitcoin traders are left with just two exchange options on which to transact: BTC-e and Bitstamp. And for those using the former to buy and sell the virtual digital currency, things went from bad to worse a few short hours ago, when Bitcoin had its very own "Waddell and Reed" moment, when the price of Bitcoin cratered by over 80% in the span of seconds, after a modest block of just under 6000 Bitcoins sent the price plunging from over $600 to $102.

However, market gymnastics may just be the tip of the iceberg - a far bigger issue, one we have been warning about since the last March surge in Bitcoin's dollar price, is that the crackdown on Bitcoin both in the US (see "Miami Bitcoin Arrests May Be First State Prosecution"), and around the world (in Russia Bitcoin was just declared illegal) is finally heating up. It's only going to get worse in an insolvent world desperate to halt money laundering.

And since digital currency advocates have finally realized they can't hold the electronic 1s and 0s in their hand in a worst case scenario, the biggest winner of the latest Bitcoin crash is none other than the real alternative currency (in Paul Singer's words), gold, which moments ago just hit a one month high and rising.

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Mon, 02/10/2014 - 09:28 | 4419464 remain calm
remain calm's picture

Gold baby

Mon, 02/10/2014 - 09:31 | 4419490 THX 1178
THX 1178's picture

Bitcoin is starting to look like DOW. Both will crash.

Mon, 02/10/2014 - 09:41 | 4419506 Stackers
Stackers's picture

Yawn, I've been waiting for this crash for over a month and thought it would have happened sooner.

Mon, 02/10/2014 - 09:43 | 4419524 AlaricBalth
AlaricBalth's picture

A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.

https://www.mtgox.com/press_release_20140210.html

Mon, 02/10/2014 - 09:48 | 4419532 malikai
malikai's picture

Yep. Nice work Tylers on failing to report the real reason for the dip.

Also nice work on pre-concluding that Gox has suicided itself. In fact, Gox appears to have done the right thing for a change.

http://www.coindesk.com/price-drops-mt-gox-blames-bitcoin-flaw-withdrawa...

Mon, 02/10/2014 - 09:49 | 4419541 GetZeeGold
GetZeeGold's picture

 

 

So I get this letter from the NSA...

 

"Our records indicate you purchased a bitcoin 6 months ago...but our predictive systems in Utah showed us you should have sold it last week. We'd just like to ask what's up with that?"

Mon, 02/10/2014 - 09:55 | 4419573 kralizec
kralizec's picture

Looks like they took care of that for you...how nice of them, eh?

Oh, paging FoneStar, FoneStar pick up the red panic phone please...

Mon, 02/10/2014 - 10:01 | 4419586 fonestar
fonestar's picture

Bitcoin is $633 on BTC-E right now, or another 7% drop by fonestar's math.  But Bitcoin can "crash" again before payday that would be great!

Mon, 02/10/2014 - 10:12 | 4419606 TheHound73
TheHound73's picture

I get paid on Mondays 0800 GMT at the market rate in BTC.  Received almost twice as much as last week, nice.

Mon, 02/10/2014 - 10:21 | 4419633 FEDbuster
FEDbuster's picture

How come we don't get 80% flash crashes in physical gold, ammo or long term storage food?

Mon, 02/10/2014 - 10:32 | 4419664 TheHound73
TheHound73's picture

Saturated markets with deeper liquidity.

Mon, 02/10/2014 - 10:51 | 4419716 CH1
CH1's picture

Oh no, Bitcoin has died... again!!!

Are we at eight deaths now, or is it ten?

The haters never learn.

Mon, 02/10/2014 - 10:56 | 4419740 fonestar
fonestar's picture

Yes Bitcoin is all over!! It's only $640!!

PANIC AND SELL NOW!!

Mon, 02/10/2014 - 11:57 | 4419943 XitSam
XitSam's picture

You can't lose if you don't play.

Mon, 02/10/2014 - 12:00 | 4419956 fonestar
fonestar's picture

As everything continues to hyperdeflate in value compared to Bitcoin, not only will they lose but they will lose big.  But lose is what losers historically do.

Mon, 02/10/2014 - 12:16 | 4420003 Citxmech
Citxmech's picture

When does BC blow through the price of gold again?

Mon, 02/10/2014 - 12:30 | 4420058 Jack Napier
Jack Napier's picture

If you don't hold it you don't own it. 6 million ways to get fleeced. Gold ain't one of 'em.

Mon, 02/10/2014 - 13:20 | 4420209 fonestar
fonestar's picture

If one ounce of gold winds up being worth 0.01 BTC five years from now, I would call that an act of self-fleecing.

Mon, 02/10/2014 - 13:31 | 4420236 yrat
yrat's picture

btc flash crash = what should actually happen in an unmanipulated market when a market sell order takes out every single bid.

 

made a cool 40% btc profit this morning in 10 sec.  could have been 10x that but who was expecting that insane red candle!  i thought grabbing some btc at 400 was a steal, but 120???  yikes.

 

i'm thinking some fat finger made a big mistake this morning.  either put in a sell order instead of a buy, OR a market sell at a lower than intended price.  the way BTC-e works, if your ask is lower than the current price, the order is automatically a market order.  selling 6k btc down to $100 just doesn't make sense.

 

lots of money changed hands this morning.  just glad a piece of it landed in mine...

Mon, 02/10/2014 - 13:32 | 4420240 fonestar
fonestar's picture

Wish fonestar could have been there but good on you!

Mon, 02/10/2014 - 14:01 | 4420316 silverserfer
silverserfer's picture

yes BTFD. Bitcoin, its a  commodity, investment, a currency. and a virtual girlfriend. What doesn't it do? 

Mon, 02/10/2014 - 14:02 | 4420326 fonestar
fonestar's picture

What doesn't it do?

Get understood or owned by morons.  That's what.

Mon, 02/10/2014 - 14:06 | 4420344 silverserfer
silverserfer's picture

oh I forgot, you can hump it with your bitdick.

Like bitcoins, you can't see it but you know its there because a computer screen says so. 

Mon, 02/10/2014 - 14:46 | 4420505 fonestar
fonestar's picture

Bitdicks are going to be seeing a lot of action if the near futurez.

Mon, 02/10/2014 - 20:28 | 4421929 mjcOH1
mjcOH1's picture

"Bitcoin is starting to look like DOW. Both will crash."

DOW has productive and tangible assets.  

Bitcoin has speculators and acolytes.

Aside from that.....well....not much in common.

Mon, 02/10/2014 - 14:46 | 4420500 Haole
Haole's picture

LOLing

Mon, 02/10/2014 - 14:00 | 4420327 A L I E N
Mon, 02/10/2014 - 17:02 | 4421068 WelfareFTW
WelfareFTW's picture

where do ya trade BTC?

Tue, 02/11/2014 - 11:24 | 4423741 aminorex
aminorex's picture

bitfinex for margined trading.  if you just want to buy and hold in the u.s. i recommend coinbase

Mon, 02/10/2014 - 12:38 | 4420085 fonestar
fonestar's picture

When does BC blow through the price of gold again?

Sometime this year.

Mon, 02/10/2014 - 14:03 | 4420328 silverserfer
silverserfer's picture

bitcoin blows 365 days a year.

Mon, 02/10/2014 - 14:12 | 4420372 fonestar
fonestar's picture

Yes, it's been blowing gold and silver's manipulated prices right out of the water for 365 days a year for five years now.

Mon, 02/10/2014 - 12:44 | 4420104 chemystical
chemystical's picture

"As everything continues to hyperdeflate in value compared to Bitcoin"

"everything"?  "hyper"?? EVERYTHING????

Dude you are officially full of shit at this point, and ANYONE who supports you is a clueless fuck point blank.

Last year you posted that you bought some Btc at $800 (after HAVING SOLD them a few months earlier at $200).

Unless you have a completely FUCKED UP selective memory and cherry pick your time frame....YOUR BTC investment has been a loser since you bought at $800.  Oh, and there's that 1600% annualized LOSS you suffered in selling at 200 and buying them back at 800 a few months later.

Everything?  I'd be 99% more accurate if I said that "everything ELSE has gained in value since the bitfraud peak at $1256.

FULL... OF... SHIT, and your idiot acolytes too.  You've managed single-handedly to all but completely discredit a moderately amusing and moderately useful item, and you've managed to alienate nearly everyone who's on the fence.  Makes one wonder whether it is YOU who is against Btc and crypto.

Mon, 02/10/2014 - 12:49 | 4420121 fonestar
fonestar's picture

I've been buying since $16 fuck head.

Mon, 02/10/2014 - 13:06 | 4420158 dogbreath
Mon, 02/10/2014 - 13:27 | 4420231 fonestar
fonestar's picture

Bitcoin nice at $666 as fonestar types.

WE'RE SO SCARED!!

Mon, 02/10/2014 - 15:06 | 4420560 chemystical
chemystical's picture

LOL.  Literally LAUGHING OUT LOUD.

I'll sell you all you can handle at $800 USD per.  That's where it was the last time you bloviated about buying.  Should be good to go now too, eh?  And if it's going to be 5, or 6 or 7 digit per USD (as you laughingly posted easrlier in the thread) you'd be a fool not to jump at $800.

FONECLOWN.  Sagacious investor (sic).    Not a pot to piss in, and apparently not creditworthy enough that a lender would help you "pay some bills"...so you sold at 200 and bought at 800.  Brilliant I tell you.  Fucking brilliant.  You can't have it both ways.  You have shaky beliefs or you';re a fucking liar.

You should be more careful remember your bullshit lies.  Tell the truth; it never changes and is easy to rememeber.

Mon, 02/10/2014 - 15:10 | 4420587 fonestar
fonestar's picture

And what lies would those be? 

fonestar would have been buying more Bitcoin at any levels anyway whether he had to sell some the month before or not.  All fonestar does is buy more Bitcoin at any price.

Mon, 02/10/2014 - 15:03 | 4420554 Kirk2NCC1701
Kirk2NCC1701's picture

@XitSam: "You can't lose if you don't play."

You should have added "You can't win either, if you don't play." to be intellectually honest.

Nothing ventured, nothing lost.  Nothing ventured, nothing gained.

Tue, 02/11/2014 - 03:19 | 4423034 Cyberg
Cyberg's picture

 

can't win, cuz I nothing to LOSE!

Tue, 02/11/2014 - 09:52 | 4423478 XitSam
XitSam's picture

You should have said "to make an intellectually honest statement."

I was just making a minor play on the state authorized numbers game (lottery) slogan of "You can't lose if you don't play."

All investment involves risk. Including gold. But gold is an investment that has never gone to zero and has a several thousand year track record. ElectroCoins have too much risk for me.

Tue, 02/11/2014 - 11:08 | 4423689 aminorex
aminorex's picture

In the case of bitcoin, you can venture nothing, and yet gain enormously.  Even a single bitcoin, basically nothing, will be enough to provide your children with retirement.

Mon, 02/10/2014 - 10:47 | 4419720 fonestar
fonestar's picture

Be looking for further drops as people try get their coins out of Gox and to somewhere better.

Mon, 02/10/2014 - 12:29 | 4420057 Slave
Slave's picture

They really need to cap your posts at 5 a day or something...

Mon, 02/10/2014 - 13:05 | 4420155 fonestar
fonestar's picture

fat fucking chance on that.

Tue, 02/11/2014 - 09:54 | 4423482 XitSam
XitSam's picture

Really?  Would you like to ask Trav about that?

Mon, 02/10/2014 - 10:36 | 4419681 fonestar
fonestar's picture

There are no fucking gold markets (for the zillionth time!!!)

Mon, 02/10/2014 - 11:17 | 4419821 thelibcentury
thelibcentury's picture

what does this even mean? 

are there individuals that exchange gold for other goods? then there are gold markets. 

 

don't try too hard to be smart, you might hurt something...

Mon, 02/10/2014 - 11:50 | 4419924 fonestar
fonestar's picture

Based on what do they sell?  Oh right, the manipulated paper contract price!  Because we all know how much the fake fed-hating (loving) gold bugs like to kowtow to the establishment.

 

MUH SHINEE MEDULS!

Mon, 02/10/2014 - 17:12 | 4421104 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

There are gold markets, there's just no longer a way for them to discover a real price based on real people who want to hold real value. 100:1 LBMA, Comex tricks, futures market slams, GLD raiding, naked short selling, rehypothecation. It's done, corrupt, over. It would be nice to think it was something you could hold as a store of value...but when you need to convert it to fiat in order to spend, and that fiat reference price is 100% totally and completely mainpulated, then you're screwed. And don't start with how you and Mad Max are going to go to the grocery store with a pile of gold dust...puh-leeze.

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