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Short

Bitcoin Collapses Following Silk Road Shutdown

MTGOX:BTCUSD   Bitcoin / Dollar
1557 16 20
Today the FBI seized and shut down Silk Road, a website that allowed customers to buy illegal drugs using Bitcoin             . As part of the bust, the government took 26,000 Bitcoins             , or the equivalent of about $3.2 million, from Silk Road.

Following the news, Bitcoin's value began to collapse.

Here's a chart that shows Bitcoin's collapse today. You can see where exactly where the Silk Road news hits.
The future of BITCOIN is bright and Rosy. Venture Capitalist firms like Andreessen Horowitz are investing MILLIONS in Bitcoins startups. There 's a bitcoin ETF coming by Q1 2014. It will be the currency of choice for online shoppers. Shopping anonymously online is good everyone, no need to put your private info online. I can't believe companies like VISA or MasterCard are not jumping on this yet ....
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Short term this has been bearish. Medium to long term this is very positive for the BTC/USD price. The impact of this raid has been highly overblown not the least by the FBI itself and the media. Tranlating 9million BTC of illegal activity between January 2011 and now into 1.2 Biliion USD by using todays prices is just as rediculous as using a price of say 0.32 USD per BTC in January 2011 and getting instead 2.9 million instead.
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Has anyone considered the possibility that this sell off was the US government liquidating the seized SilkRoad BTC wallets?
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We all like volatility. Everday we look out for mindblowing (or margin calling) bars like that :D Anyways, I expect it to to retest that insane low. But i'd be more afraid of losing out on upcomming bars of similar magnitude, the green ones.
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Bitcoin is not like a regular currency nor equity as there are no real assets behind it, circulation/purpose drives value - having lost a source of this Bitcoin will decline - diehard followers probably won't like this but should probably pause anyway and think there are those with even more coins than them that will want to elevate the posture to dissolve their positions. Combine this with numerous regulatory bodies investingating it's use is a concern for high volatility and chance of even larger devaluations.
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Price recovered very rapidly - Look at the volumes. When SR was taken offline, massive selling (most likely SR dealers cashing out their coins) but at the $109/110 there was enormous support almost the same volume as people selling. Further evidence that $100-110 is a very strong support level.

As other people have said this is now priced in I expect we will hover around the $125 mark before returning the bullish trend; the fundamentals are still sound and valid. SR was a small although visible part of the Bitcoin economy but not all of it.

There is a good chance of a large increase if the US debt ceiling is breached!
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BitHermes TheSleepyTrader
very good comment! if US debt limit touched, expect massive interest for BTC
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Price recovered very rapidly - Look at the volumes. When SR was taken offline, massive selling (most likely SR dealers cashing out their coins) but at the $109/110 there was enormous support almost the same volume as people selling. Further evidence that $100-110 is a very strong support level.

As other people have said this is now priced in I expect we will hover around the $125 mark before returning the bullish trend; the fundamentals are still sound and valid. SR was a small although visible part of the Bitcoin economy but not all of it.

There is a good chance of a large increase if the US debt ceiling is breached!
Reply
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