| Keep in mind that half of Mt. Gox's value is in BTC. They tend to receive about 1% of volume (average 0.5% commission on both sides of trade - half of which is fiat, other half BTC) Last month or so they've had about 20K or so daily volume. So 600K X $100/BTC X 1% = about $600K/month. Let's double that for good months. Hell, triple it. $1.8 M/mo, or $900K cash. I'd assume $100K/mo for salaries, infrastructure, etc. So about $10M/year in profit. Half of it's frozen. Meanwhile, they have $900K/mo in BTC. That's a liability if they can't properly cash out. They'd probably have to sell about 1/2 of what's in their wallets to get to solvency as people continue to want their money. They control like 60% of the market - so what would be the effect of about 30% of all BTC hitting the other exchanges? Assuming they could handle the traffic, it would devastate prices. Or they liquidate. 60% of all BTC flooding market. Or they go under. It'd be good for those holding in other exchanges, but that would be an epic implosion as all those BTC's "disappear". I can't see this scenario change, unless they can start fulfilling all wires within the next couple of weeks. Folks will split hairs about the fact that the freezes are on their subsidiary... but how of Mt. Gox's business runs through it? Enough that the distinction is pointless. All of these numbers are ballparked, but the deeper point: much of Bitcoin's success and attractiveness is based on the Mt. Gox exchange. Too much. It's going to destroy the market as it currently stands. The only alternative is for everyone to pull out BTC, destroy Mt. Gox, and hold as the other exchanges stabilize. |
Very good points. I hadn't considered the BTC that they keep on trades. I wonder if they sell some of this BTC at certain threshholds, such that they are constantly converting to fiat?