What do you think the Bitcoin price will do when the Feds sell the Silk Road BTC

[Elwar]

The FBI has been given the go ahead to sell the Silk Road bitcoins.

http://www.justice.gov/usao/nys/pressreleases/January14/SilkRoadForfeiture.php

The moment the bitcoins move out of the FBI address, what do you believe will happen to the bitcoin price?



As I recall, when the FBI busted DPR for Silk Road the price dropped from $120s to $80s then climbed back up and weeks later we started the rally to the new high.

I could see something like that happening again. The price will drop because of all of the new coins needing to be traded somehow for dollars. But I know that many people have probably not gone all in because they knew that would happen so many people will buy up bitcoins.

And afterwards, we will not have that sale hanging over our heads so a new rally may begin.

Thoughts?

Selling that much on bitstamp would take it down to single digits, on MtGox down in the $400s. Hopefully they are smart about it but when have we known the US government to be smart?

[GigaCoin]

The FBI has been given the go ahead to sell the Silk Road bitcoins.

http://www.justice.gov/usao/nys/pressreleases/January14/SilkRoadForfeiture.php

The moment the bitcoins move out of the FBI address, what do you believe will happen to the bitcoin price?



As I recall, when the FBI busted DPR for Silk Road the price dropped from $120s to $80s then climbed back up and weeks later we started the rally to the new high.

I could see something like that happening again. The price will drop because of all of the new coins needing to be traded somehow for dollars. But I know that many people have probably not gone all in because they knew that would happen so many people will buy up bitcoins.

And afterwards, we will not have that sale hanging over our heads so a new rally may begin.

Thoughts?

Selling that much on bitstamp would take it down to single digits, on MtGox down in the $400s. Hopefully they are smart about it but when have we known the US government to be smart?

If they dump 30K coins at once we will see $500 again, as speculators will also sell along with the fed dump. If they dump the entire stash almost 170k btc then we might see much lower lvls as current liquidity is not enough to buy them up and markets will super panic

They will Most likely sell on coinbase or as an auction.

[gizmoh]

It is evident the coins are going for Auction.
The mean btc auctioned price will be taken into consideration by the market, and price on exchanges will adjust itself.
My guess: auction price will be lower than current price and the market makers might anticipate this prior to the auction.

[thms]

The FBI will never sell on bitstamp or gox. Standard procedure is auctioning.

Plus it doesn't make one bit of a difference. It will just move from one wallet(DPR's) to another wallet, that is, just replacing one owner for another, so why would it affect price? Of course if people panic then yes, it would affect price.

IF someone buy and dumps, they will instantly lose money. So that makes no sense at all.

[seleme]

FEDs are not allowed without public auctioning so that tells you what will happen - pretty much nothing.

[Jungian]

How will the auction work? Can you only bid for the whole thing, or will every single BTC be sold separately?

Who can bid?

[Peter R]

Elwar's post is interesting because he's got a good point: we all get to watch the coins move out of this address in almost real time.

I think it is generally accepted by those who carefully follow bitcoin that the coins will get sold at auction and will never touch Gox or BitStamp.  BUT, we also know that a bunch of people still think it's possible that "they dump the coins."  SO, perhaps this will be a perfectly opportunity to cause a panic.  

One possibility:

The coins get moved.  Someone who's monitoring this address in real-time notices.  It gets posted on BitcoinTalk and on Reddit where it's up-voted like mad because the blockchain contains definitive proof.  Some people sell thinking that other people will sell.  The price drops and some people who thought the coins were going to be sold at auction start thinking that maybe the price is dropping because the coins are being "dumped" on the market.  This causes them to sell before all the bids are eaten.  Manipulators are ready--thinking in advance that this may happen--and once they see their opportunity, they dump enough coins to push us over the edge.  Next thing we know it's turned into a full-fledge panic although not a single Silk Road coin ever touched the market.  

So, yes, perhaps the price will spike lower and then quickly recover.  The fact that we can all see that the bitcoins moved adds a puzzling dynamic!

[KFR]

Personally, I wouldn't want to buy the coins; I'd buy the private key(s).  Then I'd hodl.  And if I were a manipulator I'd keep that dump in reserve until I thought it best to use it on an unsuspecting market.

[mmitech]

The FBI has been given the go ahead to sell the Silk Road bitcoins.

http://www.justice.gov/usao/nys/pressreleases/January14/SilkRoadForfeiture.php

The moment the bitcoins move out of the FBI address, what do you believe will happen to the bitcoin price?



As I recall, when the FBI busted DPR for Silk Road the price dropped from $120s to $80s then climbed back up and weeks later we started the rally to the new high.

I could see something like that happening again. The price will drop because of all of the new coins needing to be traded somehow for dollars. But I know that many people have probably not gone all in because they knew that would happen so many people will buy up bitcoins.

And afterwards, we will not have that sale hanging over our heads so a new rally may begin.

Thoughts?

Selling that much on bitstamp would take it down to single digits, on MtGox down in the $400s. Hopefully they are smart about it but when have we known the US government to be smart?

Usually things doesn't work like that, I think there will be an auction for it, or some Private deal will be organized, it would be really strange if they sold them on exchanges...

[bcd]

Drop a lot then quickly spike up for a new rally.

[medUSA]

If it is going into an auction, then Wall Street will buy them. May be not a single fund, could be a syndicate.
Then they WILL be mixed some how, cos no investor wants to buy a fund with "drugs money".
Probably they will be sold off in tiny amounts via all exchanges and they will be bought back slowly at a similar or lower price.
It is in the interest of the potential buyer that bitcoin prices will drop, but do not crash.

[outofservice]

The coins will not be offered publicly and will not be traded on any of the platforms.
While the coins are in the hands of the Feds you will not see a change.
What happens after they sell/trade them (wallet-to-wallet) is the real question.

[Elwar]

Even with an auction that is almost 30k bitcoins that someone is buying at auction instead of going to the exchange. Why would someone do that instead of just buying on the exchange?

They would only do that if they can get them cheaper at the auction. And why would someone with $25 million want to buy cheap coins? To sell them. Where do you think they would sell them?

If someone with $25 million wanted to buy and hold, they would have done so by now.

[porcupine87]

Like told in another thread: When the goverment sells bitcoins for FIAT money, thois would be some kind of ultimative legitimation. Or does the goverment auction seized drugs or guns? No! And does it auction things whose status is unclear?
-> no!

I am really unclear whether I should go short on the short term. When will this auction happen? In one week? In one year?

[segeln]

Like told in another thread: When the goverment sells bitcoins for FIAT money, thois would be some kind of ultimative legitimation. Or does the goverment auction seized drugs or guns? No! And does it auction things whose status is unclear?
-> no!

I agree,it would be the ultimative legitimation

[mmitech]

Even with an auction that is almost 30k bitcoins that someone is buying at auction instead of going to the exchange. Why would someone do that instead of just buying on the exchange?

They would only do that if they can get them cheaper at the auction. And why would someone with $25 million want to buy cheap coins? To sell them. Where do you think they would sell them?

If someone with $25 million wanted to buy and hold, they would have done so by now.

one can not simply buy 30K BTC at exchanges and pay only $1000 a coin, at this moment gox has the deepest order book of all exchanges, and if I had the funds to buy 30K BTC I would push the price over $2000




the problem of Bitcoin today is liquidity, I bet that there is many wales wishing to enter the market but  cant simply do that without pushing the price to a crazy level, this is why these wales instead invest in startups and Bitcoin companies.

and if I had that money and wished to enter the market this way, I wouldn't simply sell and crash the price, because again the Bid order book is so small that I would crash the price and basically I will end up with more bitcoins than cash, and the Bitcoins I will hold will be worthless.


I have to be an real idiot to do what you suggested above, take my words, once they start an auction for those bitcoins the purchase price will be the double of what you see on exchanges.

[porcupine87]

Even with an auction that is almost 30k bitcoins that someone is buying at auction instead of going to the exchange. Why would someone do that instead of just buying on the exchange?

They would only do that if they can get them cheaper at the auction. And why would someone with $25 million want to buy cheap coins? To sell them. Where do you think they would sell them?

If someone with $25 million wanted to buy and hold, they would have done so by now.

one can not simply buy 30K BTC at exchanges and pay only $1000 a coin, at this moment gox has the deepest order book of all exchanges, and if I had the funds to buy 30K BTC I would push the price over $2000




the problem of Bitcoin today is liquidity, I bet that there is many wales wishing to enter the market but  cant simply do that without pushing the price to a crazy level, this is why these wales instead invest in startups and Bitcoin companies.

and if I had that money and wished to enter the market this way, I wouldn't simply sell and crash the price, because again the Bid order book is so small that I would crash the price and basically I will end up with more bitcoins than cash, and the Bitcoins I will hold will be worthless.


I have to be an real idiot to do what you suggested above, take my words, once they start an auction for those bitcoins the purchase price will be the double of what you see on exchanges.

Good point. But if you want buy bitcoins for 30mio., then you can just buy 1000btc every day. But do we talk about a long term investor?

PS: one question: From what site is your pic?

[mmitech]

Even with an auction that is almost 30k bitcoins that someone is buying at auction instead of going to the exchange. Why would someone do that instead of just buying on the exchange?

They would only do that if they can get them cheaper at the auction. And why would someone with $25 million want to buy cheap coins? To sell them. Where do you think they would sell them?

If someone with $25 million wanted to buy and hold, they would have done so by now.

one can not simply buy 30K BTC at exchanges and pay only $1000 a coin, at this moment gox has the deepest order book of all exchanges, and if I had the funds to buy 30K BTC I would push the price over $2000




the problem of Bitcoin today is liquidity, I bet that there is many wales wishing to enter the market but  cant simply do that without pushing the price to a crazy level, this is why these wales instead invest in startups and Bitcoin companies.

and if I had that money and wished to enter the market this way, I wouldn't simply sell and crash the price, because again the Bid order book is so small that I would crash the price and basically I will end up with more bitcoins than cash, and the Bitcoins I will hold will be worthless.


I have to be an real idiot to do what you suggested above, take my words, once they start an auction for those bitcoins the purchase price will be the double of what you see on exchanges.

Good point. But if you want buy bitcoins for 30mio., then you can just buy 1000btc every day. But do we talk about a long term investor?

PS: one question: From what site is your pic?

this is what is happening for the last month or so, you've got buyers that buys 250-500 BTC at once and wait for a small dump and the ask to build up and buy again, the same with sells people dumping few hundred coins and waiting for the bids to build up and repeat.

in other word, I think what is happening is normal, I just hate the low volume, but hey when BTC will be worth $10K each, we will see even lower volume, and we will call 50 BTC a wall.


PS: http://trading.i286.org/

[porcupine87]

@mmitech

Ok, the markets are really cool on this. There was no significat drop after this news. I would have exprected more(a quick 5% down maybe)! Actually the price has risen 1-2% since the news  

in other word, I think what is happening is normal, I just hate the low volume, but hey when BTC will be worth $10K each, we will see even lower volume, and we will call 50 BTC a wall.

Smaller volume in BTC, but not smaller in USD. So something like this: Today there is volume of 10 000btc per day, what is 10mio. USD. In the future there will by 2 000 btc volume (1/5) but 20mio. USD.

PS: I will not sell and fuck myself for not going short on in the short term. If I will go short, I will fuck myself by ending up with less btc. Sometimes I think the whole market is against me 

[DubFX]

Logically it should drop, and then gain bigger value in couple of weeks hopefully.
But maybe it won't even drop