FBI coins could sell for a premium

[Cubic Earth]

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.

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[Melbustus]

^ Yup.

[MatTheCat]

^Mental!

[KLD]

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 register to bid then that will be fun to watch

[CryptoNames]

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.

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

[Elwar]

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.

[gentlemand]

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.

[podyx]

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?

[jl2012]

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.

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

[DeathAndTaxes]

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.

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.

[Elwar]

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

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.

[piramida]

As they get through the first few millionaires they will have a lot of bitcoins left.

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.

[Tzupy]

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.

[bitcoin_bagholder]

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.

A bitcoin is a bitcoin is a bitcoin.

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

[jl2012]

Some people don't understand that the auction is 'dedicated'. There's a 16th23rd 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.

FTFY

[Swordsoffreedom]

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.

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.

[Tzupy]

Some people don't understand that the auction is 'dedicated'. There's a 16th23rd 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.

FTFY

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.

[jl2012]

Some people don't understand that the auction is 'dedicated'. There's a 16th23rd 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.

FTFY

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.

[tupelo]

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.

[p0peji]

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.