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The management of Mt. Gox created a money machine for themselves!

Mt. Gox seems to be in a dead spiral. The management is not only incapable of running the company but also of communicating effectively with its consumers. Today’s announcement that they have nothing to announce forced the Bitcoin price on the exchange down even further. People seem to be losing all trust in Mt. Gox, despite the fact that this is not the first time the exchange screwed up big time and each time they managed to come back.

Personally I think Mt. Gox still has a 60% chance to survive so if I would still have fiat money in the exchange I would say ‘buy, buy, buy’! I know some people who are trying to buy at these prices, but this is no investment advice to my readers. There is a big risk that you will lose all your money or that at least it will be tied up for a long time to come, so stay away if you have no extreme risk tolerance and don’t understand Bitcoin well.

BTC at Mt. Gox 5 times cheaper than Bitstamp

But why is the management handling this so badly? Are they just plain stupid? Maybe, or maybe not. They might actually be geniuses, because they created a risk free money machine for themselves. Does nobody see this? The management can now buy BTC at $112 and sell it at the same moment for 5 times that amount on other exchanges. And they can do this continuously, this is an amazing opportunity for them and I would be surprised if they don’t take advantage of it.

It’s speculation, but today’s announcement only creates a larger opportunity for them. It made the price drop even further and they have more time to continue their trades. Wouldn’t it be possible that Mt. Gox lost a lot of money with the transaction malleability and is now using this to earn this money back?

The volume on the exchange seems to be about 70,000 BTC (source:, which means that theoretically they can earn about $30 million per day risk free (assuming rates won’t change too much). Keeping their customers in the dark for a few more days could be extremely lucrative for them and might actually save the company if they would put the money back in.

Like I said, this is pure speculation, but these guys are entrepreneurs and if an entrepreneur sees an opportunity…

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  1. I hadn’t thought of that. I hope you are right because then, technically, I performed somewhat of the same trick. Now I would like to get that BTC out ASAP, thankyouverymuch. Let’s indeed hope for the best!

  2. I would not trust Mt. Gox anymore after what happened, but I don’t think this is the last day of Mt. Gox. These guys have been 7 lives, and so far this is only the 5th time that the company was on the brink of death. Don’t be surprised if they rise from their ashes once again.

  3. The longer this drags on without any updates, the more I am thinking you are right. Coins cannot be transferred out… so SOMEONE must be hoarding them at this low price. Someone who, probably, trusts the situation far better than we do.