Bitcoin Forum

For large, conservative investors, this is the first chance to buy bitcoins directly from the U.S. Government.  There is an implicit guarantee that the coins to be sold are legal and without any sort of taint, at least in the eyes of the Feds.  Also, to many such investors, the U.S. Gvt is the most trusted trading partner possible.  They are the most reliable organization to trust wiring millions of dollars to.

The auction is a giant stamp of approval, if not for bitcoin as a whole, than at least for the particular set of coins at auction.

There are obviously reasons why the coins may sell at a discount as well, and I tend to think that is more likely.  My guess is there is about a 20% chance the coins will sell over spot.  After all, the supply of government-approved bitcoins is very very tiny.

^ Yup.

^Mental!

I remember someone high up in second market talking about this and he mentioned normally for off market deals sellers ask for a premium in an upward market and in a downward market buyers normally get a discount. So I wouldn't exactly get excited. If an new entrants from wall st, not second market, pantera or winkdex :P register to bid then that will be fun to watch

Great point. The skeptics are running out of arguments to base their disdain towards the legitimacy of digital currencies.

I'm about as big of a bull as anyone but I can see this sale dropping the price by quite a bit in the short term.

They're taking in minimum deposits of $200k selling in 3000 bitcoin blocks.

As they get through the first few millionaires they will have a lot of bitcoins left. Those that only deposit the minimum might be able to get 3000 coins for $200k.

That's less than $70 per coin. I'd sell $200k worth of bitcoin to get in on that deal.

Of course, there's a risk that you pull $200k worth of bitcoins out and pay the taxes on it only to not be able to buy 3000 bitcoins at the auction. You've just fucked yourself.

There've already been offers to buy the whole lot in one gulp. Whether the folks who publicised the offers go through with it is another matter.

There will be many people eager to get their hands on these coins and you reckon they'll sell it on discount? Like a fucking lottery or something or what do you mean?

Read the rules again. They have the right to sell all, some, or none of the bitcoin. The $200k deposit is just to prevent people trolling. They are not obliged to sell at this price

And as this is an open auction, it is extremely unlikely that it will be sold vastly below the spot price. $600*30000=$18M is nothing for real whales

You really think Bitcoins will go for 80% to 90% less than exchange prices?  There is zero chance of that.  It may sell at a slight discount or it may be heavily subscribed (high net worth individuals see it as being useful for getting Bitcoins with a "clear title" without wiring seven figure amounts to Slovakia) and it sells for a modest premium.  I would say +/-10% of market price.  With hedge funds being interested you really think the entire planet can't come up with more than $2M?  The $200K is just what is called "earnest money".  It just allows you to bid, and this isn't no "ebay style you only get negative feedback if you fail to pay up" auction.  They collect the earnest money because if you place a bid and can't or won't pay at settlement you have already agreed to forfeit the $200K.  It gets expensive to toll bid at $200K a pop.
 
Bitcoins selling up to 90% off retail is is just about as likely as the DOJ only getting a $1.23 an ounce when they auction off some seized gold bullion.

Ahh, ok...this is just the 29k bitcoins. I thought there were over 200k.

I agree, with just 29k they will be bought up quickly. And hopefully we will have new rich people in bitcoin.

I don't know what you are talking about, but there's over *ten million* millionaires in US alone. Also imagine how many rich people have money in USA that they need to move home without alarming local authorities. And don't forget institutions. I think the battle over these bitcoins will be hot.

This is actually a first time in history when you can buy large amounts of bitcoins absolutely safely, at a fixed price, and with a US government-signed papers for them. I think we will easily see 20% premium over market price on those.

And this is definitely that FUD dip that have preceded every rally in bitcoin history.

Some people don't understand that the auction is 'dedicated'. There's a 16th June deadline for the 200k$ deposit.
Only a limited number of people with deep pockets will get to participate in the auction. And they'll only get the coins after they transfer the whole sum, sometime in early July.
But they have to place the bids on the 27th June, so they have to bid well below market price in case the market drops further in the meantime.

A bitcoin is a bitcoin is a bitcoin.

They all look, taste and smell the same, except for those fancy physical ones.

FTFY

It is a tricky one to value the coins could well sell at a premium relative to the Bitcoin price at announcement

In other words if the market drops 10 to 15% on this news the premium would be if the Bitcoins were bought at the market price before this release
That or they offer market rates, as for your point on the taint it's a good point that in the opinion of the government these coins sold through legal auction are seized property and now they are being resold legally so there is no issue about them being illegal.

So these coins could easily get a premium if a company is interested in them.

There are 2 deadlines, 16th and 23rd June. I understood that the 16th deadline is to initiate the deposit and 23rd to reach the USMS account.

Phase I: Bidder Registration
Deadline:  9:00 AM EDT on Monday, June 16, 2014
Deadline:  Noon EDT on Monday, June 23, 2014

Otherwise, what is the 16th deadline for? I found no other mention of the 16th deadline in the rest of the document.

I think that's just a typo. See the calendar below. It doesn't even mention 16th. I think 16th is the date they start accepting registration.

Such large-scale purchases will of course not happen at market price but below it. Especially with bitcoin where it is arguably difficult to estimate a 'real' or consistent price at which these coins could be sold afterwards.

High stake gamblers exist, but this route (buying via official channels) lures rational investors in who will carefully assess their chances of selling these coins with a reasonable profit.

Not everybody follows blind slogans like 'to the moon', 'hodl', 'sodl' or 'bitcoin is doomed' as people on this forum do. It is not a battle for high or low prices, people just want to increase their value one way or the other.
And we all know that the current bitcoin price is simply an inflated number, caused by speculative savers who retain large quantities of coins from the market. If the average holding time of a bitcoin would approach a status typical of a medium of exchange and the market would find it's equilibrium then the current price would be much much lower.
This might of course change with larger adoption.

Would be awesome to see some big investors bid for these coins and them really wanting it. This would legitimize bitcoin even more and send the price to the moon.

i can imagine.. some exchanges with lower luiquidity would be interested..    if they find an investor to buy coins  and use them as market maker ....   

You're silly if you think people ready to buy these will bitch around 15-20$. They get lot of coins on fixed price, without slippage that would make price go up hundreds of dollars on the exchange.

exactly. these days there are not many opportunities to move 10 mil into bitcoin. you surely can wire that money to a non-US licensed slovenian exchange and hope they don't close the next day, then buy that coins causing a mini-rally from $600 to $900, then take a printout of three thousand little buys that happened on that exchange and give that to your accountant for tax purposes

OR you could buy them for $700 a piece by wiring money to US marshals, get a single sale and a stamped proof of purchase.

Hmm tough choice what would I do what would I do...

I think it's likely there will be a slight premium. Buying 30k coins on exchanges is doable but not easy. It would probably take a month to do so. Plus, all the risks with large sums of money. Whales have been waiting for this. Everyone knows that the price is going up now. As long as there are enough bidders, we will see a premium.

enough = 2

Hmm..

Good thought!  :)

Unlikely, there's more of a chance for them to sell at a heavy discount (if they all go to 1 buyer) and then the merchant would be responsible for selling them off slowly to obtain a profit.

How do their other auctions work? Do they usually set a minimum bid price? I don't think the coins will sell for a premium, but they won't go for much less than the exchange rate.

I don't get this logic. It's neither approval or disapproval. It's just selling property. If the government sells a seized Ferrari - does that mean they implicitly approve of Ferrari?

u should rather use this example:

would the gov sell seized drugs?

So did they dump the coins already?

+1 Interesting point!

I think the FEDs selling coins is not all that bad anyway.
Yes, there's a little more coins to go around now (instead of assuming the fed coins 'lost forever') but at least those coins could reach an audience the normal coins do not yet reach.

Yea, also, it is unlikely the buyer would just dump on a single exchange.

I think that the price that these coins sell for is going to say a lot about the current state of bitcoin.

If they go for much over spot it's a very good sign.

The deeper the discount the more I feel that would be a bad sign since there is no safer way to purchase a large amount of coins. And if the demand isn't there for this type of transaction then it's a bad sign.

Can another auction be made straight after this one or there has to be a delay between?

I doubt any investors will worry about this. Investors trying to buy bitcoin are likely more concerned about keeping their coins safe. This is why a BTC EFT will likely sell for a premium.

Anyone expecting some Ebay sniping while the markets dance around in front of a live feed is going to be a bit disappointed.

It's sealed bids and it's quite likely they won't disclose the price unless there's a successful freedom of information request. We may remain in the dark about the price achieved for a long time afterwards, perhaps always.

Lets hope this sell will end well so we can finally move on...

Of course they wouldn't, drugs are illegal. Bitcoin is not - and has never been - illegal in the United States, so I don't see the 'approval' argument. Wasn't the legal designation of bitcoin as 'property' or something (IANAL) decision a while ago more of a stamp of approval than anything else?

Well, hopefully one of the bitcoin companies will give us a number at least. Either what they paid for them or what their highest bid was so we know a minimum amount that they went for.

I'd really like to know what their value is and I hope we get that information.

So let me see if I got this straight:

1)  People think that if these coins sell for a discount to market price, then they'll immediately get dumped on the market.

2)  But if these coins go for a premium over market price, then the buyer will hold them forever.

Completely binary outcome, eh?

_{(This short sighted thinking is why the majority of bitcoiners will never be wealthy)}

Don't think the premium will be high though
Maybe 1 to 2%

There are such a vast number of bitcoins being auctioned in one go, the auction price could be more or less than the current market rate, but whatever price they go for, the market exchange rate will immediately go to that level. It will be interesting to see how this high-profile test of bitcoin's market price will turn out.

Well no, but if someone did get them for under market value I would not be surprised to see them dump them on the market all at once in an attempt to induce selling and buy back again at a lower price once a sufficient amount of others have sold off their holdings.

It's an aggressive move but there are definitely people in the btc market that attempt to manipulate the market in ways such as that.

The reason that the coins would sell for a premium (I highly doubt they would) would be because they would be paying for something that an exchange could not otherwise provide. This would not affect the time frame of any investor of these coins

Well a second reason why they could potentially sell for a premium is that here is the opportunity to buy a large amount of coins without the market price going up. If you tried to buy that many bitcoins on an exchange in a short period of time that would cause the price to increase and you'd likely end up with less coins for your money.

I really think all the coins will go above market price.
Think about it, exchange free coins, a bunch at the time without affecting the market.
Plus the winner bidders will be those who believe btc will rise in price, so they'll hoard the coins for quite some time.

From the wall thread, where I didn't get any answer so far:


Anyone in here knows if we'll ever know what price the coins fetched?

They're probably gonna get a decent little premium on the coins.  We've been in a (small) uptrend the past few weeks and this is a chance to buy tons of coins without placing a whale order that would start a rally.  I'd guess 5% or so, but we may never know by the looks of it :-\

What happens next is whoever buys them "leaks" the premium price they paid thus causing the market to shoot up so there already in the black.

Do you think it would go for a premium or for a steal. It would be nice to be over the value, but anythings possible. As for leaking, I don't know if the actual amt would be revealed. Would be nice to see who bought it and if they announce they would open an exchange or something.

any other comments on this topic?

Really hoping for this scenario.  Would be far preferable to them getting for extreme discount and subsequently tanking price to eek a little profit out.

Couldnt the losing bidders tell everyone else what the winning bidders paid for them and who it was?

I was under the impression that it was all sealed bids. This would mean like a private bid I guess. Then the auctioneers would probably look for best price.

Maybe the losers would know, I am not sure. If anyone knows more about this, feel free to answer

lol Numismatic digital bitcoins....nice.

"Hey guys I bought my bitcoins from the US Government!"

 :D :D :D

I didn't think of this one before reading this topic, good point actually! But after that info leaked it seemed that supporters of bitcoin are trying to get them so we shouldn't be worried in any way.

Necro for the lulz.  

My my, I can remember vividly not long ago when people were screaming right and left that the selling price of the SR coins would be exactly known.  And screaming that it would actually matter to the market.  Now 3 weeks later, and not only was the final price/btc paid NOT revealed to the public, but it seems the Bitcoin community NO LONGER CARES and has completely forgotten and moved on quickly.  Short term memory loss much?  

Unlike the majority, I for one don't have a short memory. I can remember all the silly, ignorant FUD that has happened over the past year.  I would chalk all the past FUD as irrelevant, except for the simple fact that the sheeple affected the market directly with their outright stupidity.

The point is, FUD is completely irrelevant and should have no bearing on bitcoiner's long term market decisions.  It's fleeting and goes away quickly.  Please keep this in mind and let this be a cautionary tale when FUD rears it's ugly head again in the future, OK?

So i wonder when will be the next block of 30k coins put in auction, there are 120k left.

Was there any kind of official word that this is the case? In theory, they could have the assets forfeited in civil proceeding without a conviction.

Lol, so i wonder what he was planning to do with so much money? did he ever spent something?, i mean he dint get houses or cars confiscated.

I think he was just amassing them all forever, since he started SR. He was on some Pinky and the Brain tip, I think...

I also care and I'm also surprised there isn't more speculation on the topic.  I think people where expecting some negative actions as far as the price of BTC goes.  So far there as been no real swings so not there hasn't been much attention given to the matter since, which I agree is odd.

Maybe he just had them in paper wallets, and they just found them sitting on his coffee table?

IIRC the media reported that he was logged into the SR website as an administrator (I think it was kind of like a console that allowed him to do various administrative tasks - resolve disputes, release funds from escrow, process manual payouts) and they basically had all the funds held at the site manually paid out to a wallet that they controlled. A dumbed down way to say this is that Ross had a unlocked/unencrypted wallet open when they arrested him.

I think I read a story somewhere that said some FBI lady, was running towards him, screaming something like "I never want to see you again" grabbed his laptop, then a bunch of FBI agents came out and arrested him.

Wow, so they got him disatracted so he wouldn't be able to close his laptop?

Only a matter of time, I guess.
After what this auction's results... I imagine they might be sold a lot above market price!

They (she) distracted him so she could get close enough to him then she snatched his laptop and the other FBI agents arrested him. Apparently he would frequently use that library to connect to SR and didn't use many (any?) other spots to connect (as per media reports IIRC).