Quote from: thelonecrouton on January 15, 2015, 03:50:48 PM

Quote from: Minotaur26 on January 15, 2015, 03:37:39 PM

My conspiracy theory is Bitstamp needed to buy back the coins they lost to balance their books and the best way to do that was crashing the price.

The price on January 4th was around 285 USD and they lost ~18K BTC or ~5.1M USD at the time. They decided to cover the lost in BTC for their customers, they didn't have any option but to absorb the loss and respect the BTC balances of their customer in the exchange accounts.

But did they really had all those coins? Or were their books unbalanced and operating on fractional reserve, so that if everybody withdrew at the same time they wouldn't be able to honor all of the coins. And even if they did, how to recover their losses?

Answer: crash the price. At the bottom of the crash on Bitstamp 152 USD, getting the 18K back was ~2.7M USD, that is almost half the amount of the original loss. Obviously I am just speculating, but they definitely benefited from the crash, that conveniently happened right after they "lost" all those coins.

This unregulated market definitely needs a decentralized trust-less exchange, so we don't have to guess.

As good a theory as any.

For the 238th time, every idiot who keeps a balance on an exchange is contributing to the downfall of all cryptocurrencies, because the exchanges just short it all to oblivion or rig the markets at will so they can extract fiat from your increasingly worthless cryptobag.

Currently all the exchanges are just acting as central banks. We know out there in the real world how that works out, and who profits. Hint: not you.

Also, with under 0.5% of crypto currencies held on exchanges, most of those cash valuations are "works of fiction". This is because, if you had $3 billion to buy up all the Bitcoins at "today's price" and offered 5% over "today's price", 99.5% of owner's of Bitcoins would refuse to sell. This is opposite of Stock Market, were all the shares remain on the open market even when they're owned by people. If, someone wants to buy a plc, they simply table an offer with a premium over "today's price" and the bid would get 50%-80% acceptance levels.

Therefore, the cash prices on Fiat Crypto Exchanges are largely "works of fiction". But, they are needed for two reasons: a) SHA256 and Scrypt algos, the manufacturers of ASIC equipment need Fiat Currency to produce more ASIC devices. b) investors in crypto currencies may need Fiat Currency for personal crises.

People mining "to be rich in Fiat Currency" day to day (Fiat Currency Profiteers) will always flatten any crypto currency bubbles over the medium term. When a lot of them exit from mining Bitcoin or Litecoin, like recently they will simply dump whatever coins they had, because they made all their profits in 2013 and 2014. They had no intention to own or hold any crypto currency. So, when some of these people exited the crypto currency market this week they simply dumped whatever Bitcoins they had left over for Fiat Currency to reinvest into non-crypto business ideas.

In terms of the reasons (a): developers of crypto currencies have sought to develop POS coins, this removes the flaw of needing sell crypto to fund manufacturers of ASICs mining equipment. Secondly, it removes the flaw of Fiat Currency Profiteers in low electricity cost countries (Iceland there is an extra 33% profit from cheaper electricity) selling down a crypto currency to become richer in Fiat Currency. However, POS coins have introduced a new flaw, needing to connect to internet to earn more coins means the coins cannot reach the higher valuations of Bitcoin or Litecoin or Darkcoin or 42coin, because people would be to worried about hackers stealing their coins e.g. no-one is going to do POS with over $10,000 of crypto currency!

This does not apply to GPU algos like X11, X13, X15, Neoscrypt, Lyra2, etc. The GPU's lose value very slowly, even when they are out of warranty GPU's can fetch decent prices for video gaming. Most of Fiat Currency Profiteers with 7950's, 7970's and 7990's are expected to exit the non-ASIC algos in 2016, when there GPU's start failing.

The main remedy, to Fiat Currency Profiteers, is to mine coins at low profits (not worth people in low electricity countries doing) or breakeven levels or loss levels for several years and those collected coins doubling in value after a big block halving. This deferred payment of profits, will remove most Fiat Currency Profiteers, who are always seeking the quickest ROI's? However, it does mean mining bigger and older coins like LTC, FTC, VTC, BTC, etc are safer crypto currencies to be collecting.