Bitcoin Forum

The last time this happened was back in september/october 2016 then within the year bitcoin had its all time high at $19k.
https://www.coindesk.com/us-marshals-1-6-million-bitcoin-auction

This month happening on February 18th they are planning to auction even more due to seizures in their sting operations causing confiscations totaling 4040BTC
https://www.newsbtc.com/2019/03/08/bitcoin-whales-cryptocurrency-auction
https://cointelegraph.com/news/us-marshals-to-auction-37m-in-confiscated-bitcoin-in-february

Do you see those who are purchasing them to cause a dump in the price due to selling them off or a bull run just like back in 2017?

Is there any indication that past USMS auctions sold bitcoins at a discounted price? Unless bidders are buying at significant discounts, there's no reason to think they'll turn around and immediately sell them.

If anything, these bitcoins might fetch a premium for the same reason that "virgin bitcoins" (https://cointelegraph.com/news/virgin-bitcoin-most-in-demand-crypto-that-is-regulated-differently) do. They are officially whitelisted by the US government.

In what way the market is going to move isn't known precisely. Already similar incident has taken place and the same gives a thinking that the price of bitcoin will get dump due to the auction of such a big number of bitcoin. Even if there happens a dump it'll recover for the big move. Each and every news relative to bitcoin is a speculation. So lets believe the market not to react big on such occasions.

In recent times, these police auctions haven't seen the BTC being sold at much lower than spot rate.

Even so, even if they manage to buy the BTC at 20% discount, that's paying around $29 million for around $37 million worth of Bitcoin.

The daily turnover of the Bitcoin market is around $30 billion right now. So even if they dumped all $37 million at once (which nobody in their right mind would do), it would only transiently affect the price of Bitcoin.

Realistically, I think they'll get it at more like a 2-5% discount, since it's pretty much-guarnateed profit

I surmise that those who are going to purchase this bitcoin specially at a discount price are big investors, meaning they have crypto investment backgrounds. And I will think that they are going to buy this bitcoin because they know that bitcoin halving is coming, and they are waiting for the price to be pump. With that reasoning, I don't think that they will simply dump it, on the contrary they might going to hold and wait for the block halving and see how their investments goes.

No. This was discussed multiple times times!

There will be no dump.


Coins are auctioned off at a premium. In the past those who were buying were paying more than they would by bying on a regular market. It would be stupid for them to lose money trying to sell. Obviously they want to avoid exchanges and that's why they're choosing to buy in bulk and pay more. They aren't going to run to Binance, do KYC there and start dumping at a loss.

Read about fresh minted Bitcoins catching premium prices. People are ready to pay more for unused Bitcoins so they're also ready to pay more to avoid shady exchanges, especially the Chinese ones.

The price getting dumped is a result of global exchanges' average price for Bitcoin, which is reflected from the Buy/Sell orders on these exchanges. Once the pressure on buyers is high (few sellers @ stagnant higher prices), the price starts to increase.

Unless these 4040 BTC is sold in exchanges in batches, and with prices stagnant and drives the price lower, it could actually dump the price. But this type of news selling those coins in auction, might get huge attention and drive the buying force (buy orders) higher.

I think it was a normal reaction of the market that was seen recently. This might be the caused of it because whenever we have news like this, the market reacts quickly as if it's really moving down because of the sell offs. Some whales might be cashing out to USD so that they can join the auction and buy those coins with a possible discount.

Yes, it is like free advertising for the bitcoins. This may pull some new buyers. Even if prices go down, it may be for a short period and it will come back. If one is already in crypto markets for long time then they know that all these things will not impact much on the bitcoin prices in the long run.

If they are selling at much-discounted prices then for the short term we may see prices correcting for a while. If not, I don't think it will impact much on the current bitcoin price.

That's interesting, i thought the price would dump hard, and it is also questionable where did the US government get these vast of amount of bitcoins ? cause bitcoin has an pseudo anonymous feature we wouldn't actually know if they've bought or gotten from exchanges violating laws of the state.

If they hold these many bitcoins, how much left they have stored, are they the ones that have caused the major correction in 2018-2019 ?

You could easily easily be traced if you're careless and if you don't know what you're doing. Sending the funds on a custodial service that has your personal information can easily easily associate you with the coins. Remember, there's a big difference between pseudonymous and anonymous.

If you read the article, it states that:


And if you're an interested buyer, you need  $200,000 to sign up for the auction. So signing up requires you to put all your personal data, thus it will be recorded in this document, (https://www.usmarshals.gov/assets/2020/febbitcoinauction/Bidder%20Registration%20Form.pdf), so you can be traceable.


How can they caused major corrections in 2018-2019 when they are just holding it? Doesn't make sense.

there has been hundreds of this type of auctions where the seized coins, that are usually a lot higher than this, are being auctioned and so far i have never seen any of them cause any kind of additional fluctuation in bitcoin market more than it normally has already. and i don't see this small auction be any different than any of the previous ones.

Something of the sort did happen in 2014, with the Silk Road coins:


I'm not aware of any similar phenomenon being observed since though. At this point especially, people already know that a lot of investors are stocking up on Bitcoin, so the auction drawing attention won't be turning any heads. This is unlikely to move the needle significantly in either direction.

I also don't think the coins will be dumped immediately. People who have the resources for something like this aren't usually looking for a quick buck, especially with the paperwork involved. Either way, I'm skeptical that 4k coins being dumped is large enough to trigger a sell-off.

Nope. I remember the endless conjecture about the first Silk Road auction. People were screaming doom and insisting that we would all die. Then fuck all happened and fuck all has happened with every single other one ever since.

Daily OTC volumes are likely often higher and people don't shave their pet polar bear and apply eyeliner to it at the prospect of that.

The previous government auctions < Silk Road > did not have a significant impact on the price. The thing is, you never know who is buying those coins, so you cannot anticipate if they are going to buy & dump or if they are going to buy & hoard those coins.

Previously, some of the buyers eventually were identified and some of them were long-term hoarders. So in cases like this, those coins was bought as a long-term investment and it had no immediate impact on the price.  ;)

Even if the new owners of these coins dumped all the 4000 coins at once, it will only have a small impact on the price.  :D

I don't think so?? I mean, it's kind of just like the BTC of USMS being added into the total volume of the coins being transacted through the market, and if you were to make an analogy, it's like a single drop of water across the vast sea. Not only that, it may even reach higher values than compared to the current market price, and buyers wouldn't really sell their bought coins at a lower price now wouldn't they? Especially since the coins being sold could be guaranteed as "safe" since it came from the USMS.

And even if it did somehow affect the market, I doubt it would be enough to cause a dump/run. May push the price down for a bit, but that's it I'd suppose?

This will make a major role in the market and I think it is one of the reasons for the sudden rise in the price since last month. We need to wait a little longer after they've sold those BTCs. I'm sure many investors already planning to join that Auction which will happen in a few weeks. base on its past history, this will be a good thing for the crypto market and they choose this date because they know more people will be interested to buy this year because of the Bitcoin halving which will happen less than 100 days from now.

Imagine making the decision to auction of 4000 BTC prior to the upcoming halving.

Can't see the relation between the 2016 auction and the 2017 bull run.

I don't think someone would pay at an auction even $500/BTC under spot to only sell it after. It's Bitcoin, it's volatile. A drastic price change could happen at any given time.

Someone will probably be buying these Bitcoins to hold on to them. It makes no sense to buy it and then just dump the market.. just my opinion though.

I'm sure almost nobody's heard of this auction. I'm up to date with most crypto news and I've never seen "auction" in the headline of an article.

But isnt this be the main reason they would look for a mixing service so have their whereabouts uncertain?
That is their cause of existence and the need in the crypto space isnt it?

Anonymity was the vision of what satoshi had in mind when he created bitcoin.
This is what I have always believed and the traceability on bitcoin was just needed so to keep a ledger of all transactions. Just like bookkeeping in financing of any corporation so when there is an audit they can not cook the books. :D
This reminders me of tether and what is going on with the ceo of cryptocapital late last year. ::)

Perfect timing to hype and increase the price of Bitcoin for Bid.  This authority sure knows what they are doing.  Getting much profit and reducing the possibility of a market crash because of the current positive sentiment of the market due to the upcoming halving event.

Yes, I've heard about the auctions in 2019, so I suppose they are pretty common. What I did not know is that the amounts for sale have been higher than right now... I am actually surprised I've never encountered anything about it. The auctions I remember were on way smaller amounts of BTC (at least one auction that comes to my mind now). I do agree that these things usually don't have any effect on the market, so this might pass by without changing anything once again.
The op seems to suggest that the auction might have triggered the pump, but again I don't remember it being the case or being actively discussed when the pump occurred.

That amount is surely huge in my opinion, but I don't really think it will do a huge impact on the price of Bitcoin, It will just cause a lot of attention on the people that really like Auction and Bidding because the amount of Bitcoin is definitely huge, and pretty much right now the price on Dollar of that 4040 BTC is $39,050,640.00 USD right now and it is still increasing so the winning of that Auction would surely earn something from the money he would lose from that Bid.

Ugh, but the goverment knows who bought them? Kinda loses the point.


The media stories will generate enough interest to counter the sell off, if it happens.
And as previously said, the bitcoin market is huge enough now so it wouldn't suffer from such a sale.


Depends on the price they purchase them for.


BTC price and trade volume was lower as well.

It's an auction whoever the buyer will be he will be indicating it's fair value and I don't think anyone in that auction will be lowballing anyone since they know it will be easier for them to liquidate it after they won the price I'm sure that their buying price will be close to the current market value for Bitcoin. If they bought it at near market value it will just be a dumb part on them if they decided to sell it quickly just to earn a few hundred dollars or less so no I don't think that this auction will cause any kind of ripple effect in the market since it will just be like a whale buying thousands of BTC in an exchange which he will just hold them off to earn when the next significant price movement comes.

I am not going to start making assumptions that the price will fall due to what has happened before. This time it might be a different story. Since I have had a strong faith that the Halving we have next will cause a bull run. Maybe this auction that the US government is about do might cause a decrease but after that the price might still get back up and keep going up.

A decrease in price might even lead to lots of Investors rushing in and thereby leading to a serious bull run. You just never know. The thing with Bitcoin is that things happen when you least expected them to happen.

yes the amount is huge  but it will only have an impact once they sell this amount of btc to an exchanger  and will surely cause the price to dump hard  .

 i find this amazing because btc is also being auctioned  , what i thought is that physical stuffs are mainly being auctioned  .  they are smart because they want to earn more other than selling this directly on an exchange   . also  ,  the winner of the bidding can also loose because the value of btc can still dump

No, that was not the last time.
A simple search and we have:


March 05, 2018   Lynzey Donahue
Approximately 2,170 bitcoins to be sold
https://www.usmarshals.gov/news/chron/2018/030518.htm

NOVEMBER 4TH
This sealed bid auction is for approximately 660
https://www.usmarshals.gov/assets/2018/marchbitcoinauction/

FOR SALE
Approximately 3,813.0481935 bitcoins
Opens: Thursday, January 11, 2018
https://www.usmarshals.gov/assets/2018/bitcoinauction/

As some others have pointed out bitcoin auctions for seized coins happen quite frequently.
So, with facts invalidating your theory, there is nothing left to speculate, isn't it?