I'd speculate the price level is now being protected by 'insiders' with large existing positions.
By one estimation, 1000 people own 54% of all Bitcoin in existence. 10,000 people own 78%. The market could be easily manipulated by a relatively few number of people.
On the day the Mt Gox news box, the number of buy/sell transactions increased by ~300% from the day prior, but the currency was mostly stable. To defend the price level on that day, about $75 million was required. So it's a big bet. But also minuscule compared to the amount of capital that traders on Wall Street play typically work with.
I wonder who is buying it? I wonder if increasing the concentration of wealth into the hands of the few will eventually have adverse consequences for the value of Bitcoin?
It would be so great if there were a remotely-operated "punch" button aimed at reporters writing blatantly incorrect information about topics they can't be bothered to research or understand properly. I, for one, would be dishing out a fair amount of black eyes, particularly in the Bitcoin space. That is all.
I hope it does collapse, and when it's $50 I'm going to buy a whole bunch--because it's a limited comodity, and this might slow down desire to grow bitcoin mining farms--and w/ less supply, demand goes up, and w/ more demand, price will inevitably rise again - especially w/ so many businesses now using it. -- This is obviously a rehash of garbage content from other fear-mongering reporters who obviously don't know shit about Bitcoin and currency in general --other than the article/articles that they are rephrasing in their own words to look sophisticated.
Even at $50 a coin--it would still NOT be considered a collapse--as long as anyone holds it or trades it, or any business accepts it--which thousands have based their WHOLE business on bitcoin, so yeah--not going anywhere...
Values will drop, but that's happed all the time, it's a very volatile currency--but that's also why there's so much profit potential--wait for $100, but up 10 bitcoins @ 1000, then watch it shoot to $2000/coin and rake in the profits...
Banks have failed before but that DOES not mean they took the USD, or GBP w/ it! Cause people STILL use it!
This is a joke. If anything this incident demonstrates bitcoin's resiliency. The drop in value has not been catastrophic, and other exchanges seem to have done a find job of picking up the slack.
I think security is going to be a persistent issue for bitcoin, but once bitcoin services become more sophisticated will fade as an issue over time.
I love the quote "Having Mt. Gox shut down is to bitcoin what having the New York Stock Exchange shut down is to our equity market," said James Angel, a professor of finance at Georgetown University.
Food for thought for all those that praise Bitcoin's resilience. In the regulated stock exchanges around the world there are laws and steep penalties around doing things shady. In the Bitcoin world there are none. The fact that everything is anonymous only adds to the issue. The value of bitcoin is determined by what people are willing to purchase it for. I am no financial expert (not even close), but as a programmer I think to myself, "If I was a bitcoin exchange and wanted bitcoin to recover it's value, I would just write some code that made increasingly higher value trades between an anonymous wallet pool so that all the trades seem legitimate." Noone would know if these trades are real people or in fact simulated between exchanges. Considering how quickly oil companies were to do price fixing until it was made illegal, it doesn't take too much imagination to think that every exchange out there are working together in some way to control the price of bitcoins.
bitcoin won't receive government backing any time soon, if ever. Cyber security risk is at an all time high and on the government's NSA agenda.
The next war won't be fought on the ground, it'll hacked out in the deep web. Until regulation /security concerns are shored up bitcoin isn't a viable long term currency option.
