Quote from: justusranvier on March 12, 2014, 05:32:16 AM

You'll only be able to withdraw bitcoin IOUs, not actual bitcoins on the blockchain.

Maybe, but what with the gold market manipulation story is beginning to get more recognition, I wonder whether it will be quite so easy to come up with a good excuse to defer delivery or give out IOUs. Precious metal delivery is logistically complicated when you're dealing with the volumes traded on big markets, there's almost certainly a million and 1 excuses that can operate at multiple levels of responsibility. Bitcoin delivery is obviously too simple ("Hot wallet demand too high" is the best excuse that can possibly be used).

I think the community should be ready to scrutinise the ease of withdrawal, and publicly deride anything less than instant, direct access.

Quote from: justusranvier on March 12, 2014, 05:32:16 AM

Market makers will be able to naked short as much as they want, and when they fail to deliver the bitcoins which they never actually had they'll be able to deliver dollars (which they can borrow into existence from the Fed for 0%) instead.

Regulation means that Wall Street wants to enshrine their preferred forms of corruption and fraud into the system while keeping competitors out of the game.

This I can thoroughly believe. Manipulating the bitcoin markets right now must be expensive, and a little emasculating. This should make that job cheaper. Of course, this is yet another place for dollar liquidity to be soaked into, but you can also look at it as yet another driver towards a limitless QE printing press. It's difficult to decide whether feeding this monster will either help surpress bitcoin to a comedy price, or aid the case for bitcoin further due to an increase in QE volumes to comedy quantities, or both. Either extreme is ultimately costly (if not expensive in a meaningful sense), so I'm thinking that it might be more valuable to just use the market capture in a more traditional way to manipulate the price cycle. Hong Kong and Singapore are getting into this game too, and bankrupting bitcoin exchanges isn't going to get blamed on bitcoin forever, especially if someone outside the direct influence of Wall Street can instead make it seem like Wall Street sucks at bitcoin.