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by mrvc 5480 days ago
It's not really $500,000 though is it? As soon as you exchange a small amount of that into dollars you crash the exchange and the value drops significantly. I'd estimate it at about $30,000 worth.
5 comments

If you try to cash them out all at once, yes.

On June 12th, $3,5M were exchanged on MtGox. For 8 of the last 10 days, the daily volume has been above $1M. I think that you could get these $500K in small chunks in a few days, provided you do it full time.

Edit -- Source: http://bitcoincharts.com/charts/mtgoxUSD#rg30zigDailyzvzcvzl...

Allegedly.

Without an unbiased third party auditing of their accounts I would be loath to place too much trust in data they themselves produce to say how awesome they are. Especially with such a significant amount of capital allegedly at stake and nothing to lose for bending the truth.

Granted the market is easy to manipulate with small transactions that can start large swings; as well it would be difficult to find a buyer if you wanted to liquidate a lump sum of this size without a solid discount.

That said, I think you're overstating the impact this would have. The recent downswing from ~$30 to ~$10 in a period of a couple days was speculated to be due to MtGox consolidating 20 times this amount.

Can you elaborate on how to came to the discount factor you used?
He means that there isn't enough people to cash with the current rate. That is $500K.
Yes, I realize that, I'm just wondering how he came to 30k.
Without knowing how much real backing the exchanges have it's hard to get a figure on what effect a large dump would have on the market. Additionally, you'll get shock dumpers who do a run on the exchange once they see value erosion. $30,000, although fabricated, feels right. Although i'd add that's probably an upper bound rather than expected value.
Perhaps that was the reason for the black friday.
Isn't that why Mt Gox has a dark pool?