Bitcoin Forum

OK, the USMS auction of 50K BTC from Silk Road seizure is finished: http://www.forbes.com/sites/katevinton/2015/03/10/three-anonymous-bidders-take-home-50000-bitcoin-in-silk-road-auction/

The question is: What would you have bid for the 50,000 Bitcoins?


My bid would have been $111 per BTC for the whole lot, however, I really don’t like buying seized assets because it fosters more seizing and a culture of seizures. As evidence by police department, sheriff offices, and whole cities actually depending on seizures as a revenue resource for the running of their entity.

Think about it, when the police take “ill gotten gains” from the “bad guy” isn’t the system laundering the money back into the system?   If they want to do the right thing for everyone, simply put all of the money, property, etc into a furnace and burn it.  As for the btc they could simply send it all to an irretrievable address, effectively destroying the coins.


Anyway, what would you have bid for the coins?

I would have paid 217 or below, to diverge from the price discussion, If we decided to treat any coin differently than another it would destroy the Fungibility of Bitcoin (http://en.wikipedia.org/wiki/Fungibility), (1 Bitcoin is always equivalent to another Bitcoin). Think about this an Ounce of Gold is worth an Ounce of Gold, even if the gold was used to purchase drugs, or was taken directly from the dirt. If we treated "hacked", "dirty" or "Ill gotten coins" differently I think it would be bad.

If I had the cash available, I probably would have bid $300 per BTC.

I don't recall when the seizure took place exactly, what's the USMS "cost basis" for when they acquired the coins?

I'd have bid just under current market value. Say it was $250 beforehand, if have bid $240 or so per coin. Actually of I really wanted to buy 50k BTC ID have paid market price for it as had I put a buy order online for that I wouldn't be able to buy 50k worth of BTC for the same price without artificially raising the price.

This is very strange because you as well as other are willing to buy a wholesale item at retail value, to me that's crazy, then when you factor in that this is a deadline sale, must sell, motivated seller, etc ... it's even more insane to pay retail.  

Eh, but to each his own (12.5 mill)

between stamp/finex you can buy about 20k coins at any given moment, your avg cost will probably be 305ish (if 280 was the price at auction).


even if you bought all those coins, you'd set off a firestorm in the market upwards.

so if i was looking at it as an investment to acquire 50k coins at a fair price, i'd submit a bid at about 15% over market value.

  :o [faints] ???

read what i wrote very carefully. If i was looking to acquire all 50k coins at a fair price.

When the news came out for the date of the auction the price was around 220-230 regardless of the pre pump auction i would have paid no more than 200 and that is easy money for them as we all know. It's the thing about stolen goods it is roughly 3rd of the price so your $111 is so much more realistic than what they got..

You'd offer a premium for a large block of coins? Don't see the point, if you really wanted 50k coins, you could just buy them as they become available (not place a single order for 50k). Because once you have those coins, you're going to move the market in the opposite direction when you try to exit... 15% premium to buy, plus a push down when you sell, you're looking at needing to see those coins go up 20-25% just to break even....

Maybe I'm wrong, but I didn't think that bidders weren't limited to a single bid...

if you injected 14m into finex/stamp even over the course of 1 week people would notice. that is how illiquid they are (especially stamp)

Given that govt took (stole, confiscated, seized, appropriated, etc ...) the coins 'fair price' is probably a misnomer.  Nevertheless, as you can see here: http://coinmarketcap.com/currencies/bitcoin/#markets there are a ton of public markets for BTC so with a little work you could easily amass 50K coins
without a peep.

However, this is not a public sale, it is not subject to the norms of public sale as you indicated above.   This is not only a private sale, it's one where
only a few are invited, bidding is blind (bidding against one's self) and you have a highly motivated seller.  All of that screams fire sale, doesn't it?

I agree with the op stolen goods should not be sold, if a common man sells stolen goods he will be arrested for handling and selling stolen goods and may go to prison, but it is ok for them to do it of course because it was from 'the bad guy' makes it ok.

That being said i would buy them if i had the chance but it would be nowhere near market value i would pay close to the op about 100 -150 them greedy fks wanting more than market lol

About 10-15% below market so I could flip them in a reasonable time with a nice buffer for swings.

The fact i do not like nor care about the government would make me not want to set any bids on the auctioned coins to put anymore of my money in their pocket.

Having said that i would put a low ball bid into the mix of around the same as the op about $100 maybe a little more but nowhere near what they got over the market price is crazy lol

My reasons for such a low bid would be because i dislike them and the way they received not the bitcoin itself.

I believe that anybody that would have bid below-market or at-market rates would not have won the auction.The alternative of buying 50,000 coins on the exchanges would drive the price way up, so bidders were already willing to pay at least market rate. In fact, it is possible that the recent rise is the result of auction losers buying on exchanges.

That assumes that there are people who want to buy 50000 coins and would have to otherwise buy on exchanges.

I am pretty sure that this is a rare case.

The same goes for them selling if they 50,000 they would have got a lot less than market price would they not?

Also if i wanted 50k bitcoins then i could get them at market you would set the buy walls across multiple exchanges and they would get filled in a couple of weeks max without affecting the price.

Who ever brought them at or above market the govt would have seen them coming lol Stolen property brought at a premium  ;D

you are being very, very kind.

I'm guessing the USMS chose the avenue they traveled expecting to get about 50% to 70% LESS than the face value of the merchandise. If they wanted face value they would have sold it on the open market little by little like anyone else seeking face value.  The also could have advertised a minimum bid of $200 so that everyone knows they want face value plus.  But none of that happened because they knew they would not get it.  Not just because all of 2014 was a buyer's market, and not because if they sold everything at the same time in the public market they would OBVIOUSLY get less in the aggregate, but because no one in with that kind of money is buying wholesale quantity at retail prices -- it's a fire sale auction NO ONE in their right mind expects to pay anywhere close to "market" value for anything at a "must sell" auction.

Actually they always got close to face value in previous auctions of BTC. So maybe they did again this time.

My point was that above market is unlikely, close below market is very likely and even 10% away from market is pretty much impossible due to arbitrageurs.

What they reasonably expected to get and what they got could be two totally different things, every blind auction is a hail mary pass; you throw it because you want it to work not because you expect it to work and when it does connect you are as shocked as everyone else in the whole stadium.

Anyone in BTC market knows values could easily swing 15% in a week and 20% over the span of a month.  So would be unwise to make a blind wholesale bid of anything close to public market value.  If all of 2014 the market trend was down, down, down; only recently did it do an about-face and go up, up, u [stuck at $299].

So, you would NOT buy a big amount of BTC in one month at -20% if you had to pay for them today, with delivery in 1 month?

Highly unlikely that I would do that arrangement.    I'd do the 20% discount for cash and carry, however, I would not do a mere 20% discount for seized goods, It would need to be a minimum of 50% discount if I get past the ethics of the matter.

it doesn't make sense that you bid lower than the market price because getting that amount in an exchange is more difficult and untrusted

I wouldnt by it because I would never in my life need to own 50k bitcoins

That is a pretty personal reason then. Because I think most investors leave their ethics at home when trying to optimize their portfolio.

I would have bid no more than $220 in case the auction crashed the price.

The coins were split up in lots and you were able to bid on smaller amounts. 2k/5k if I am not mistaken.

Actually the best logic is in line with only buying at a lower than market price.

Private transactions rarely influence the public marketplace, and when it does its because there is a lot of merchandise, that is not the case here.  It is unwise to compare or contrast private transactions with public marketplaces transactions.  The private market is only influenced by the activity at the public marketplace to the extent that you permit it to; there is motive for the seller to pitch that argument, but no reasonable reason for the buyer to accept that rationale.

Even if it wasn't an auction you should expect to get a discount for buying in bulk (wholesale),
even if it was a bulk sale you should expect to get a discount for buying at an auction,
even if it wasn't a bulk sale auction you should expect to get a discount buying from the govt,
even if it wasn't a bulk sale auction conducted by the govt you should expect to get a discount buying seized goods,
so when you have
a bulk sale auction of seized goods conducted by a govt agency you logically should expect what?  Face value?  Come on, think.







Nothing rare about those ethics, that's why all of the foreclosure and seized property auctions are not constantly packed and selling things at, near, or above market value.



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http://www.usmarshals.gov/assets/2015/dpr-february-auction/

Winner Of 27K Bitcoins Purchased At USMS Auction Revealed

To date, the United States Marshal Service has allegedly held three auctions for a portion of the 144,000 bitcoins confiscated in the wake of the October 2013 Silk Road bust. These auctions are claimed by Qntra to have allegedly occurred due to the continued refusal by the USG to respond to FOIA requests for further information on the alleged winners of the Bitcoin auctions. To that end, Qntra conducted and has now concluded its own investigation into the identity of the winner of the largest sum of bitcoins in the auction held by the USMS on the 5th of March 2015. That person's identity can now be revealed as real estate advisor, property manager, investor and entrepreneur Larry Dean Silvey.

http://qntra.net/2015/03/winner-of-27k-bitcoins-purchased-at-usms-auction-revealed/