Quote from: JorgeStolfi on February 26, 2014, 11:27:43 AM

Quote from: kkaspar on February 26, 2014, 08:49:25 AM

You seem to be forgetting that there were also a lot of fiat afloat at mtgox that was meant for BTC. BTC will lose that fiat, and probably any new fiat that would of came from those who owned it.

It's fun to see how everyone are trying to downplay the gox situation and are trying to make this look good.

Exactly.

Between Feb/6 and Feb/11 the price had a permanent drop by some 50--60, almost certainly due to news of MtGOX's troubles. (Feb/10 was the first disappointing press release IIRC.)

I believe that the final demise of MtGOX did not have an immediate effect on price because speculators had been following the story and were expecting that event, so their reaction happened weeks ago (and it was negative).

However, the headlines in mainstream media are going to scare away potential investors who might otherwise have joined the market. As for the long-term investors (who own bitcoins but do not read the forums and may check the charts only now and then), some of them will decide to sell their coins and invest into something else.

Oh dear, Jorge. Have you *still* learned nothing? This time it's not about misunderstanding BTC, but how markets work...

>However, the headlines in mainstream media are going to scare away potential investors

Repeat until you understand: Price does *not* follow news.

Some will claim that "news follows price", which probably goes too far, but in principle even this (exaggerated) mantra is useful to remind our naive monkey brains of (admittedly unintuitive) truths.

Fact is, the *exact* same argument ("this will scare away new investors!") was made in September last year when Silk Road was taken down.

The *exact* same argument was made when price dropped sharply from ~260 to ~60 in April last year.

In either of those cases, nothing like that happened. In case of SR, it was particularly stunning how the brief flash crash (that did happen as a result of the news) revealed a solid underlying buying pressure that was lying dormant until then. It started the rally that led to the December ATH, in fact.

Please note what I am saying vs. what I am *not* saying: I don't claim to know whether the bear market just reversed. Just that looking at an "objectively bad" news item and concluding it will negatively affect price will get you nowhere in market analysis. It's simply not how the human mind seems to work, collectively: any event is interpreted in a highly contextual framework. And right now, I would be careful to conclude that the result of that interpretation is going to greatly depress price (see, e.g., the very solid recovery to ~600, or the huge jump in USD on the Bitstamp order book)