$1.6Mln Bitcoin Auctioned Off in US: Will Bitcoin Price Increase?
The US Marshals service will be auctioning $1.6 million worth of Bitcoin from various cases on August 22. Will Bitcoin price increase?
$1.6 million in confiscated Bitcoin will be auctioned off in a single day by the US Marshals Service (USMS).
Totalling around 2719 BTC in one block, the Bitcoin comes from various sources connected to both criminal and civil cases. The auction will be online on August 22, 2016 from 8AM EDT to 2PM EDT according to the USMS in a statement.
With a large portion of the prize forfeited coming from the Silk Road investigation, the USMS stated that only 2.8 BTC actually came from the United States v. Ross Ulbricht case while another 1294 BTC was from Matthew Gillum, one of Silk Road’s dealers. Another 65 BTC was from the Carl Force case, in which he was sentenced for stealing Bitcoins during the investigation of Silk Road.
Other sources include the IRS, US Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security and Department of Treasury. The USMS also said that 664 BTC was from the Sean Roberson case. Prosecutors said he created an online store to sell counterfeit credit and debit cards. These might be the last Bitcoins for the Ross Ulbricht case for running Silk Road, the infamous Bitcoin-accepted online black market.
How to participate
In order to participate in the auction, bidders must first register with the USMS by August 18 to be eligible to submit a bid on the Bitcoins worth $1.6 million USD (BitStamp). As well, bidders must deposit $100,000 before the auction via wire transfer, including a receipt to prove the transfer.
During the auction, once a bidder places a bid, there can be no changing it. This is Bitcoin that is being auctioned which means that the winner will get the most volatile cryptocurrency to keep. There is a very high chance of increasing value.
Since bidders are buying at a $586 per BTC and the highest price in the last few months has been $750, it will be a bargain. If they hold and sell at a higher price, this auction will be profitable for the winner. Also, if they don’t sell, they keep a piece of history.
Will this affect Bitcoin’s price?
With this announcement by the USMS, this will raise the awareness of Bitcoin and might potentially increase trading volumes or price. Also, with the amount of Bitcoin transferred to the highest bidder, no one knows if they will hold onto their Bitcoin long-term or will sell once Bitcoin reaches another 3-month high
During the 2014 USMS Silk Road auction of 30,000 Bitcoins, the Bitcoin price rose by $50 over the course of a day due to the interest of investors. For now, we must wait and see if the winner will hold or sell. Once they sell, the price for BItcoin should increase due to some 2719 Bitcoins placed at the same price.
Exchanges such as Kraken have a trade volume of around 23,000 BTC, with 2719 added, this might influence the bids.