About 6:45AM GMT, selling started picking up on MtGox and then turned into an avalance as prices cratered from around $250 to begin the day to a low of $137. The selling pressure triggered an all-time high in spreads between MtGox and BTC-e to around $450.
Today is another ‘MtGox day’ as the exchange is expected to provide another update about withdrawal delays and whether their implementation of technical changes to solve its problems of transaction malleability are effecting. Typical announcements from MtGox have arrived during the afternoon in Japan, or around 11AM GMT, so we are still at least an hour away from when the update should be expected to arrive.
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Unlike previous sharp moves from MtGox, the current selling hasn’t come with the arrival of rumors spreading on social media sites such as Reddit and Twitter of fake posters claiming withdrawals or bankruptcy to be taking place. As such, the prevailing idea being theorized is that a large holder, possibly an insider was selling ahead of the announcement. Whether that is true of not remains to be seen, and may never be known.
Another possible theory is that stakeholders such as market makers or major miners, that are partners with MtGox, but not direct employees, are the current sellers and are looking for a fiat exit. However, what is difficult to assess is why would bitcoin holders feel more comfortable holding fiat at MtGox instead of bitcoins due to the existing month or more withdrawal delays for dollars (although euro SEPA transfers are being reported to be processed quicker)? The continual rotation appears to be relating that the ‘big money’ truly believes that their bitcoins aren’t safe at the exchange either due to potential insider theft or possible government confiscation.
Whatever the reason is, now we wait.