Quote from: morningtime on November 14, 2013, 07:34:32 PM

Quote from: Alpaca Bob on November 14, 2013, 12:58:12 PM

Quote from: morningtime on November 14, 2013, 12:45:55 PM

Money stuck in exchanges keeps the Bitcoin price artificially high. If Mt.Gox ever processes all withdrawals, more people will convert to fiat to get their money out. So prepare for a price drop when they do.

It might also increase trust in bitcoin and the ecosystem, which could lead to another run-up.

Hi, how exactly does money stuck in an exchange increase trust in Bitcoin? It lowers trust, because people wanting to cash out are frustrated thinking "what good is Bitcoin if you can't get your money out to pay rent".

The effect is a dam reservoir of Bitcoin waiting to be cashed out. If you can only put money into BTC, but not out, then the price goes up. Which is what we see happening. But once the "flood gates" open again, BTC price will come crashing down as people dying to cash out will cash out.

You're assuming everyone stuck in Gox is dying to get out?

This might be true, of course, but once liquidity returns, wouldn't trust return as well?