Third Bitcoin Auction – 14 Bidders - Essay Example

The US Marshals Service (USMS) held a third auction for 50,000 bitcoins a few hours ago.

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The auction sold bitcoins seized from Silk Road worth about $13.4 million.

The USMS informed that around 14 bidders took part in the auction. They placed 34 bids in the 6-hour event, which is more than during the second auction was held in December 2014 when 11 bidders placed 27 bids.

Even though the figures of the latest auction were higher, they were lower than the first bitcoin auction held in June. In the June 2014 auction, 45 bidders participated and placed 63 bids.

Renowned venture capitalist Tim Draper had secured almost all of the 30,000 bitcoins in the first USMS auction. However, he won only 2,000 bitcoins in the second event.

The Silk Road was shut down back in October 2013. The authorities stated that it was an online marketplace for illegal drugs and other prohibited activities.

A USMS spokesperson suggested that the auction is being evaluated at present. All the bids are being reviewed.

He said, “No further information will be released until the conclusion of the auction process, when financial transactions have been completed and bitcoins have been transferred to the winner(s).”

The agency informed that details about the winner cannot be revealed before Monday.

It seems that people’s interest in bitcoin has increased recently. This overlaps with the increased activities in the bitcoin markets. In January, the price dropped. After that, it maintained relative stability for a period.

This week, there is a positive change as price of bitcoin is rising. Bitcoin reached a recent high of $284.14 but it fell slightly since then. The value of bitcoin is down to $273.90 at press time.

The trading desk at SecondMarket was among the confirmed participants. Second Market is the company which entered the winning bid in the second auction by USMS.

The NY based firm had won 48000 out of the 50,000 bitcoins in December.

This third auction of digital currency confiscated from Silk Road is the second event involving the bitcoins confiscated from the online black market’s site operator Ross Ulbricht.

A total of around 144,000 bitcoins were seized from Ulbricht when he was arrested arrest. He was later, in February, accused of operating the website.

Many express concerns about how the auctions have an impact on the trading price of bitcoin. While the first auction led to a drop in prices, it recovered soon.

The December auction did not have any massive effect on the bitcoin price. It is expected that the latest auction will not instigate any major price movement either.

Even after the third auctions, 44,000 bitcoins are remaining. These bitcoins worth around $11.8 million press time and will be auctioned soon.

That will be the final auction but the time has not been determined yet.