Bitcoin Forum

BTCOn Friday, the U.S. Marshals auctioned off the nearly 30,000 Bitcoin seized from infamous online drug bazaar Silk Road. The Marshals planned to sell them off in nine blocks to different bidders, but one bidder wound up beating out the competition: venture capitalist Tim Draper, for whom VC-ism runs in the blood (his grandfather and father were successful VCs, and his son runs a tech incubator). During a press conference Wednesday, Draper refused to reveal how much he paid for the Bitcoin — valued at about $17 million the day of the auction — stating only the obvious, that he “paid more than the other people in the auction.” According to a Marshals spokesperson, 45 bidders had made 63 bids.

Read more " http://www.forbes.com/sites/kashmirhill/2014/07/02/tim-draper-silk-road-bitcoin-auction/ "

He must have paid above market rate at the time of the auction and below the current market rate (ie, between $570 and $650). If he discloses his below current market rate bid, bitcoin price will fall towards his bid level. His new fortune will shrink by millions in fiat terms.

Why do you say that he must have paid below the current market rate?

Because, from what I've read from speculators, it would create a perception that the coins *should* be valued at that price point as well as some degree of fear that Draper could sell them off now for a quick profit. Clearly, if it was the case Draper wouldn't want to devalue his own holdings by stating something that he doesn't have to. Personally, I'm not sure whether I agree with the reasoning, but then again humanity isn't exactly that logical, so reasoning doesn't always explain pricing fluctuations.

well, this is the first of more auctions by fbi
they have another 110k bitcoin approx?

why show his hand when he will want to buy again at future auctions one would imagine

future bidders now know lowballing will get them nowhere and they will have to buy on open market discreetly and keep price down (whats going on now) and will have to outbid serious people and funds in auction format

I wonder if he bought it less or in a higher price. But since its in an auction and has more than 40+ bidders I guess he acquired it with more expensive price. ???

I'm sure the price will be revealed or get leaked at some point. Wont the government have to state officially somewhere how much they sold them for? Would seem a bit shady if they didn't disclose this info.


Yeah, why would anyone do that? Doesn't make any sense.

Government - shady?  Are you kidding?

who cares how much he paid. thats his private business. after 4 years of people wanting governments to stay out of bitcoins and not have regulations and not make everything public,... a few of you now want full disclosure of someones bitcoin transaction.

seriously?

how about you reveal every transaction you have done. and get all your family and friends to upload their credit card statements.

knowing about a 30k bitcoin transaction is meaningless. bitpay do more then this all the time.. so does coinbase, so does alot of merchants. so how about asking for businesses to show you their business audit/financial reports, before asking for someones private deals

THIS

^ it's the same with satoshi's privacy. i find it quite funny that satoshi is quite the legend here, and how everyone loves him (probably because he made them wealthy). yet, if you revere him so much, why are you so interested in going AGAINST his wishes.. and try to dox/expose him? that's obviously not what he wants.

people only want privacy when it benefits them. and transparency when it benefits them.

The price is kind of irrelevant. Auction prices do not set market prices in any economy.

wrong. bitcoin still has a relatively small market cap, so one whale who's willing to spend on 30k coins is going to largely sway the price of bitcoin. if everyone knows a whale with that kind of money is willing to back it, people will feel more secure in investing.

I highly doubt that one person or organization will be able to buy the 144k coins that will be available after DPR's trial. Then again, bitcoin could be worth a lot less, so  its hard to speculate, but my btc is on it being much higher.

I assume he paid above market. Trying to purchase this amount at 'market' price would cause an upswing so big you'd end up paying even more. Plus of course, he had the opportunity to purchase from a known and trusted party, which should be worth a premium.

i doubt it'll happen, but 144k coins is only $94 million at $650 per bitcoin. a whale who has big plans could afford that, but it's probably too risky.

Does anyone thinks that 63 bids were ALL below market price?

The same is true for the government who was selling the coins. Draper could have purchased the coins at any time, but the USMS had a deadline to get the coins off their books. Draper had the known and trusted party advantage as well as he had to provide identifying information and had to "send first"

No, I don't, but I think most of them were, especially the ones that were amalgamated bids of small bidders.  After all, if you just wanted 10 bitcoins you could just go buy them no problem off of an exchange.  So no need to bid high at an auction.  However, if you wanted 30K of them, well you would probably want to bid above market as buying that many off an exchange would move the market against you.  In short, I think Tim Draper made a masterful trade, the price of BTC was down on news of the auction, so he could pay a bit above then current market and sweep up all the coins and then ride the rebound wave.  While I wish he would tell us what he paid, I can't blame him for not doing so.

It's 144,000: https://blockchain.info/address/1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw

I wouldn't count on an auction for these anytime soon, if ever. A motion has been filed for them to be returned to their rightful owner, who knows how long that will take. Even if he is found guilty, they will still have to prove that the coins were actually proceeds from Silk Road. Remember, Ross was a fairly early adopter, it is entirely possible that he could have bought them, or even mined them himself. Silk Road launched in February 2011, and he surely didn't think the project up, and create it in just a couple days. I would think it took him several months from inception to launch, and remember, just six months before SR's debut, one could've bought 144,000 Bitcoin for probably less than $5000.

Not saying that this is what happened, just saying it's a definite possibility that he could've in fact acquired some, or all of those coins legitimately. After all, he did start the first legitimate Bitcoin Market with hedging and escrow. You probably wouldn't do that holding little to no Bitcoin.

+1 Those coins will be tied up in the courts for years. Even if the US government eventually prevails after years of litigation they could then even be worth more that the US government’s official gold reserves.

I don't see any benefit to why he would, or why he should disclose this information.

This has to be it.

Actually, that is complete nonsense.  We know from failed bids that he paid more than $675.  Even if he had got the coins below market rate, he could not sell them without crashing the market and losing money overall.  And this isn't his "new fortune." He already had a fortune, he just exchanged it for bitcoin.

Finally, he's already publicly discussed his plans for the coins.  He is a professional.  He didn't get control of millions of dollars formulating the sort of ridiculous conspiracy-laden get-rich-quick schemes that everyone on this forum seems to be obsessed with.

I think it should be definitely higher than market value.

Can you give a link to where it says he paid more than $675 please? The only definite bid price I could find was $403 from one bidder. I could not find definite bid prices from any of the other bidders.

Maybe that suspense is.

LOL, yep, and then the USD value will be based on Bitcoin instead of gold, so they'll probably hodl em!  ;)

Though I don't agree with blacklisted/whitelisting coins. The coins sold in the auction are guaranteed 'clean',  to some people this reduces a risk and therefore gives them more value. So comparing them with the market price is not a direct comparison as the product is slightly different.

AFAIK there are no links to the amount of the winning bid as it has not been announced. Anyone that says otherwise is simply spreading rumors.