What You Need To Know About Friday's $16.7 Million Bitcoin Auction
The U.S. Marshals on Friday will auction off 29,656 bitcoins, worth roughly $16.7 million, they seized from the Silk Road website.
Bitcoin is a volatile asset easily moving five percent or more on a day with no news. This auction will add additional volatility to the price.
The auction period runs from 6:00 a.m. to 6:00 p.m. ET Friday. The winning bidder will be notified Monday, June 30, by 5:00 p.m.
Bidders need to have wired $200,000 from a U.S. Bank to the Marshals as a deposit to participate in the auction. There are nine blocks of 3,000 coins and one block of 2,656 coins. At current prices, the smallest block has a worth around $1.5 million.
Those large capital requirements mean bidders will either be wealthy individuals, organizations with U.S. bank accounts or group buys. Helping identify bidders, the U.S. Marshals accidentally released a list of potential bidders' email addresses. The list included bitcoin executives from companies like SecondMarket, Coinbase, DigitalBTC, Bitcoin Shop and Bitcoins Reserve.
The bitcoin price has been on a slide since the auction was announced June 12, dropping about 15 percent. Coindesk and Forbes have written that the price will continue to slide and there will be increased selling pressure on Friday. With respected outlets like those and the slide that has already taken place, there will probably be an additional drop in price through Friday.
This drop may provide an opportunity for bitcoin investors to pick up coins at a perceived discount, as nothing has fundamentally changed about bitcoin as an asset.
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