[SPECULATE] What do you think will happen if GoxBTC hits the other exchanges?

So as you've all probably learned over the past week or so, MTGox has decided to put another smear on the Bitcoin community and tarnish their own, already well-tarnished past by halting ALL fiat and BTC withdrawals due to transaction malleability. (Something to ponder on is the fact that multiple exchanges shut down withdrawals due to this protocol abuse. BTC-e, Bitstamp to name a few.. And they quickly restored their services in a timely manner, while Gox is still tossing out "we're fixing it" announcements.)

They've released several statements on their website mentioning that they were working on various issues to get it sorted out, but in the meantime, moved their office to a virtual office due to "security reasons" and reportedly no longer have a physical office. Because of these recent actions, many folks in the community are thinking that Gox is insolvent and are making preparations for a run sometime soon.

But, some few savvy investors are trying to make an opportunity out of a terrible situation; deposit fiat into Gox, and purchase the absurdly low GoxBTC in hopes that they will keep to their word that withdrawals will resume "soon."

If that's the case, then Gox BTC will FLOOD the other exchanges in what I believe will be an almost fire-sale like environment.

Should this scenario play out, I see BTC recovering from the mass sell, but only time will tell how low it will go. A good many people have had their cryptocurrency portfolio hit hard, and are going to be looking for any outs to make a quick profit from the recent events.

Are you going to hold your coins? Are you going to short them for the time being and ride the current wave? Will you buy in when the coins are cheaper?
What do you think will be the result of the most current MTGox fiasco?

 

It sure as hell is going to be a bumpy ride.
That is if mtgox decides to give the btc back to the customers instead of running off with them.

 

I'm probably gonna buy in.

 

Nobody will do anything except for a few people will buy a very small amount of circulated bitcoins. There will be none to sell due to hoarding.

 

If you think logically, you'll realize it's definitely NOT going to be a hoarding mentality once GoxBTC is released for withdrawal. With people such as a group of Chinese investors who had over 4,000 BTC in Gox and saw their value plummet over a week (and MANY others who lost significant fortunes in their crypto portfolio) a lot will be seeking to recoup any losses as quickly as possible. There are already sites and forums you can go to that are allowing people to do GoxBTC / Non-Gox BTC swaps at a steep rate. People are still putting fiat into Gox to buy BTC that they won't know if they'll EVER have access to, for ONE sole purpose. To sell them as fast as possible once Gox resumes withdrawals for quick profit.

Folks that are angered by the loss have access to cheap GoxBTC which are currently around $120 - $130 a piece. If you happened to have 20, 30, 50 thousand USD in GoxBTC and you lost almost 80 to 85% of that value (since they were $850 each a few weeks ago), would you not sell as many coins as you can by undercutting the current market value? What's to stop people from dumping huge quantities of BTC at 300, 400, 500 USD each to recover what they lost? They're still technically making a profit (or rather, recovering losses). Although emotion shouldn't drive investment decisions, most people aren't cut out for that and make rash decisions anyway.

At this point, I personally feel that whichever conclusion plays out (whether Gox goes under due to insolvency or they resume withdrawals), there is going to be at least a $50 to $100 dip. The panic sellers will come from either side; those that suffered severe losses / loss of confidence in Bitcoins due to Gox insolvency, OR the enormous BTC dump that will ensue should withdrawals be allowed.

I still believe BTC will recover in the long run as it has multiple times before.

 

Well, we all knew this would happen eventually. Bitcoins make people get so greedy look at silkroad as example. Mtgox is taking the btc and bouncing.

 

So I don't think the gox funds will be released any time soon lol.

 

Agreed.

Recovery will take a few months as the community works to repair the image of Bitcoin and regain investor / mainstream trust that there will be some assistance in place to help consumers get some protection from situations such as this. Gox will soon be a distant memory, but a painful reminder of the abuse of trust that occurred. Even if they plan to rebrand, I highly doubt the community will fall suspect to them again. There are already well established players on the field today that will most definitely take up all previous Gox users with wide open arms. Gox was in all truth and honestly, just not cut out to be the front-runner of Bitcoin exchanges to begin with. Being first doesn't necessarily mean being the best, and Gox has proven time and again that they are incompetent and incapable of running an enormous global operation such as this.

Karpeles might not face any criminal charges as Japanese regulators are taking a hands off "I told you so" attitude towards the situation for all the money lost, but there must have been some very wealthy people using Gox that have lost significant sums of money due to his incredible negligence and I'm sure they have their own ways of sorting matters out in a whole slew of methods. I mean, there were rumors that Silk Road had some connection with Gox back in the day as well; and I'm sure people have suffered terrible things for much less pain/loss of money than he has caused.

Prison may be a blessing in disguise for him in the future, only time will tell.

 

Looks like it's getting worse and worse by the looks of it - the worst thing is all the lives they ruined, forget the BTC.

 

Right now, I think the community as a whole has definitely initiated the recover phase in a professional manner and seem to be handling the issue quite well.

Now imagine yourself this little scenario.

"Nasdaq insolvent, investors capital frozen, stock trading halted!"

I think the panic that would ensue from that would be much more detrimental and harmful to the US economy than what Gox did to BTC. Just goes to show the resilience of not only BTC, but the community behind the idea as well.

Prices have recovered a bit, and have been stable for the last few days (with the recent buy / sell walls, support for the 550+ range has been unanimously strong across all the major exchanges, and it would only take a small injection of capital and good news to give way to a significant rise back to the 700 - 800 range.