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« CNBC: "There's A Rumor There's No Gold At Fort Knox" | Main | Perma-Bull Abby Joseph Cohen: 'Buy Stocks, Sell Bonds' »
Thursday
Apr112013

Bitcoin Down 50% In Massive Sell Off: $1 Billion Vaporized

The bloodshed continues today.  Watch the mayhem unfold.

Bicoin real time quotes: http://realtimebitcoin.info/

Check out the $5 spread on the bid-ask.  Reminds me of the old Nasdaq days before high frequency trading.  Currently bidding 118.75 asking 123.50.

---

 

UPDATE - Bitcoin exchange freezes, arbitrarily shuts down

 

The carnage is palpable.  

Aftermarket chart for Bitcrash, from 100 to 200 and all points inbetween.

Background

Just a few months ago the total net worth of all Bitcoins, a popular encrypted digital currency, was worth about $140 million. The non-tangible exchange mechanism is used by people all over the world to purchase everything from traditional goods and services, to illicit trade that may include drugs and stolen credit card numbers. The coins became a go-to digital store of wealth around the world after the meltdown of the Cypriot financial system, and was pushed as a ‘safe’ way to preserve wealth out of view prying government eyes. All of the excitement surrounding Bitcoin has driven the price of a single unit to in excess of $250, giving the total Bitcoins in global circulation a market capitalization of over $2.5 Billion in just a few months time.

 

Today's Carnage

Bitcoin is undergoing a classic correction after quintupling in price over the past 30 days.  The currency, which was trading as high as $265 earlier today on Mt. Gox, plummeted and is now trading at around $150.

We’ve reached out to one of the biggest exchanges, Mt. Gox, to see what happened. But another San Francisco-based exchange called TradeHill is saying that the crypto-currency is falling because of apparent distributed denial of service attacks on Mt. Gox and Bitstamp. A denial of service attack happens when an attacker overwhelms a target with external requests, so that it can’t honor regular requests from legitimate users.

This also happened last week when Mt. Gox when Bitcoin reached $142 and hackers attacked the exchange. At that point, Mt. Gox said it had suffered ”its worst trading lag ever.”

The Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”

Read more at Tech Chrunch...

 

 

The chart we posted earlier today along with a simple question.

What could possibly go wrong?

And then it did.

 

Earlier Today

Coinsetter Lands $500K To Help Bring Leverage, Shorting To Bitcoin

Update: A new Bitcoing platform will allow leverage (via margin) and the ability to short the market. We can only imagine the hour-by-hour margin changes.  Furthermore, Coinsetter intends to offer accredited investors (because wealth equals smarts, right) the ability to earn interest on Bitcoins.

Continue reading at Tech Crunch...

Here Comes Bitcoin Opportunity Fund... This Time With Leverage And Shorting!

Trading Bitcoin Versus Traditional Currencies: A Forex Comparison

A Bitcoin Platform Made For Active Traders - http://www.coinsetter.com/

 

 

Finally, this must be disturbing for Bitcoin users:

Trojan virus takes over computers and forces them to mine for Bitcoins

 

 

Bloomberg says Central Banks are getting nervous about Bitcoin...

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Reader Comments (18)

Somebody lost some shit today. However silver is still holding around $28 which should seem as some sort of bargain.http://www.bullionspotprice.com/silver Comparitively speaking of course
Apr 10, 2013 at 11:15 PM | Unregistered CommenterSKINFLINT
I would feel much safer with silver or gold than bitcoin.
Apr 10, 2013 at 11:44 PM | Registered CommenterDailyBail
Somebody help me out here. Is the bitcoin fad just a scheme to empty the pockets of the gullible? Or is it a globalist totalitarian tip toe (Icke) towards acceptance of paperless money by the public? Either way, it smells.
Apr 11, 2013 at 1:10 AM | Unregistered CommenterMachtNichts
MachtNichts

Neither.

It started as an experiment at MIT. In many ways it still is an experiment. There are many virtual currencies, but Bitcoin is the most popular. The number of coins is FIXED forever at 21 million. The supply will never change. Check out the Wikipedia on Bitcoin. It's a good resource to start with.

http://en.wikipedia.org/wiki/Bitcoin

And there's much more here:

http://bitcoin.org/en/
Apr 11, 2013 at 1:58 AM | Registered CommenterDailyBail
Ponzi scheme
Apr 11, 2013 at 3:36 AM | Unregistered CommenterTed
If you still wanna play buying Bitcoins in the UK, directly without intermediators on ebay or other pages (with huges fees) is very difficult , I made this guide with a simple process:

http://howtogetbitcoinsuk.blogspot.co.uk/
Best
Apr 11, 2013 at 5:04 AM | Unregistered Commentermarktt
Bitcoin was an experiment at MIT to prove that a fixed monetary system like gold based currency doesn't work. And they've proven their point, haven't they? The hypothesis was that with a fixed amount of coins/tallies/ounces/etc, the system would have very quick cycles of boom and bust.

Looks like they were right, eh?
Apr 11, 2013 at 7:18 AM | Unregistered CommenterToki
The timing is odd. Crossed my mind that perhaps bitcoin is gov sanctioned to channel all the mony fleeing bank bail-ins into ponzi.
Apr 11, 2013 at 8:03 AM | Unregistered CommenterCanuck
Funny how the libertarian currency is behaving the way libertarians claim state-backed currencies do.
Apr 11, 2013 at 9:39 AM | Unregistered CommenterBenjamin
Tech news site Ars Technica linked the crash to the antics of an anonymous Bitcoin owner who gave away around $13,000 in Bitcoins via the Reddit social news site. The unnamed person, who used the alias Bitcoinbillionaire on Reddit, randomly picked 13 different people to receive the coins. One lucky Redditor got a gift of about $5,000 (£3,250).

http://arstechnica.com/business/2013/04/bitcoin-crashes-losing-nearly-half-of-its-value-in-six-hours/
Apr 11, 2013 at 12:23 PM | Registered CommenterDailyBail
But the rising value has meant the MT Red mining pool, which is co-ordinated via Reddit, cannot keep up with its financial obligations to its pool members and is shutting down. The "soaring price" has made it impossible for MT Red to cover what it owes to members, an administrator said.

http://bitcointalk.org/index.php?topic=15929.msg1793833#msg1793833
Apr 11, 2013 at 12:25 PM | Registered CommenterDailyBail
Was $1 billion really "vaporized" or did it just change hands?
Apr 11, 2013 at 1:19 PM | Unregistered CommenterAtticus
Apr 11, 2013 at 3:15 PM | Registered CommenterDailyBail
A nice $5 spread on the ask.

SWEET.

Reminds me of the old Nasdaq days before computers.

Currently bidding 118.75 asking 123.50.
Apr 11, 2013 at 3:26 PM | Registered CommenterDailyBail
This is headed to 75 before a rebound. Mark my word.
Apr 11, 2013 at 3:32 PM | Registered CommenterDailyBail
Was $1 billion really "vaporized" or did it just change hands?

---

It was vaporized. There is no short selling (yet) in Bitcoin so no one made a profit on the fall. As of now about $1.5 billion of market cap has been obliterated.
Apr 11, 2013 at 3:35 PM | Registered CommenterDailyBail
Digital currency is the easiest to steel, that's why the Bankers want to move to a one world currency.
You don't play their game, your account goes to zero!

Buy "PHYSICAL" Gold & Silver!

The Bankers are telling everyone to get out of Gold because the price is going down, but at the same time they are buying as much Gold as they can. Do you think that maybe they know something most people don't?

Get out of paper assets, Buy "PHYSICAL" Gold & Silver!
Apr 11, 2013 at 4:24 PM | Unregistered CommenterJohn
Some smart schmuck fleeced the stupid goyim!
Apr 11, 2013 at 9:17 PM | Unregistered CommenterIt is I only

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