[vasilipupkin]

yes. from the article:

"The most obvious way, in my view, that Bitcoin mania will turn into Bitcoin panic is when a Bitcoin depositor goes to sell their BTC for dollars – and there are no dollars available to satisfy that sell request."

coinbase has to have the dollars to let me withdraw those dollars from coinbase to my bank account. They may not have enough on hand.

[ifdefdebug]

but that's a different problem. If you want to sell BTC for dollars, you depend on the order book to have enough bids in it to satisfy your request, or you have to make a sell order and hope for someone to take it. Exchanges don't have to show liquidity for that, they have to show liquidity when people want to withdraw their assets (edit: complete truncated sentence).

[vasilipupkin]

yes, that's the problem. the order book is already quite thin - and in a panic, it can disappear and reappear at a much lower price.

[mrb]

Bitcoin's trading volume (and implicitly order book) is already bigger (impl. deeper) than stocks with comparable market capitalization, eg:

BTC: $160B market cap, ~$5B traded/day

INTC: $200B market cap, ~$1B traded/day

So if there was panic selling of INTC, the stock would presumably dive deeper and lower than a panic sale of BTC...

[vasilipupkin]

sure, panic selling is possible in INTC, absolutely. Valuing INTC is easier, though, because it actually pays dividends and because it can be compared to other stocks.

[paulpauper]

it is a lot lower than than that. you have to divide by the number of major bitcoin exchanges

[vasilipupkin]

Not sure I follow.

[ifdefdebug]

Very true. That's why a stop loss to market is a total suicide in this market. Better do a stop loss to limit and if the limit fails, keep your coins and wait for better times...