Silkroad seized bitcoins to impact price?

[skivrmt]

Quite a drop over the past 24 hours but a decent rebound.

Makes you wonder what'll happen when they announce they're going to sell the 144k coins

Hence people investing in bitcoin is really no different than gambling.

Investing is often a kind of gamble. For examples, in stocks most of the people do not know if they will go up or down in advantage.

This is technically true, however if you do your research and put your money in companies/investments that are less likely to fail then this is less like gambling.

Any choice we make is not really different than gambling. We choose based on our knowledge and experience and hoping the choice of one outcome is better the choice of another outcome.

This is true but in gambling generally the house has an edge and most people come out behind over the long run. Proper investing, stocks, bonds, gold, real estate most be -should- come out ahead in the long run.  Where does Bitcoin fall?  Hopefully in the investing side.

As far as the price drop.  It was certainly due to the news.  More coins to hot the market.  Same thing happens to stocks all the time.  Shares get released by insiders, price drop.  Simple dilution.  If a smaller company does a secondary stock offering (ie, more dilution) the price will drop.  This happened to Bitcoin.  The difference being 30k in coins is not a major dilution, but its certainly something.

[AdamSmith]

The auction will certainly have impact on price.

Will be interesting to see which big whale will openly bid on controversial coin and how much discount will be given on the size.

[elementalworry]

Short term it will but longterm no way.

[Ashbite]

It will certainly have some impact on the price. It might drop a bit but will recover as it always does.
A whale might buy it all and sell it for the profit, who knows.

[JerryCurlzzz]

It depends how many prospective investors there are out there who have not bought, waiting for an opportunity like this. Could be a lot of pent up buying pressure off the exchanges.

[djjacket]

Will the sale price be released after the sale?  I don't think these coins will be dumped on the market and I venture to guess that Winklevii, SecondMarket, or an exchange may purchase these coins.

[barbarousrelic]

All the people saying that a government auction of Silk Road seized Bitcoins won't affect the price of Bitcoin are wrong.

They assume that the people buying Bitcoin at government auction would not have bought Bitcoins otherwise. This is almost certainly false in the majority of cases. They are mostly people who want to buy Bitcoins, and decide to buy them at the government auction instead of an exchange. This means fewer bidders on the auctions, which will drive down the price.

[djjacket]

All the people saying that a government auction of Silk Road seized Bitcoins won't affect the price of Bitcoin are wrong.

They assume that the people buying Bitcoin at government auction would not have bought Bitcoins otherwise. This is almost certainly false in the majority of cases. They are mostly people who want to buy Bitcoins, and decide to buy them at the government auction instead of an exchange. This means fewer bidders on the auctions, which will drive down the price.

I agree on this point which is why I was wondering if the sale price will become public.  If it does become, public and it is much lower than current market rate, it could cause a correction in the marketplace.

[polynesia]

I agree on this point which is why I was wondering if the sale price will become public.  If it does become, public and it is much lower than current market rate, it could cause a correction in the marketplace.

Usually, the auctions are very transparent, with disclosures of number of bids as well as the bid amounts.
Have a look at the auction of this Toyota Tacoma
http://gsaauctions.gov/gsaauctions/aucitdsc/?sl=41QSCI14219001

If this is the case, then there will be price swings as each bid comes in during the auctions.

[djjacket]

Usually, the auctions are very transparent, with disclosures of number of bids as well as the bid amounts.
Have a look at the auction of this Toyota Tacoma
http://gsaauctions.gov/gsaauctions/aucitdsc/?sl=41QSCI14219001

If this is the case, then there will be price swings as each bid comes in during the auctions.

Oh - that will be fun to watch... I could see a whale push the price up and affect exchange rates upward as well.  I wonder what the duration of the auction would be.

[Alley]

What about the people that lose the auction?  They may decide they still want bitcoins and start buying off exchanges.

[Parazyd]

What about the people that lose the auction?  They may decide they still want bitcoins and start buying off exchanges.

That would push the price upward. But it's unlikely to happen. No one will drop 3M USD on a market.

[DurbanPoison]

Did you see the article that said the Marshals accidentally leaked the potential auction bidders list? Pretty much well to do people and long term investor types. Nobody who gets these auction coins will be dumping them on an exchange any time soon.

[ShakyhandsBTCer]

All the people saying that a government auction of Silk Road seized Bitcoins won't affect the price of Bitcoin are wrong.

They assume that the people buying Bitcoin at government auction would not have bought Bitcoins otherwise. This is almost certainly false in the majority of cases. They are mostly people who want to buy Bitcoins, and decide to buy them at the government auction instead of an exchange. This means fewer bidders on the auctions, which will drive down the price.

I agree on this point which is why I was wondering if the sale price will become public.  If it does become, public and it is much lower than current market rate, it could cause a correction in the marketplace.

If the price is lower then the market rate then the buyers would have a greater incentive to attempt to arbitrage the market.

[kqpahv]

All the people saying that a government auction of Silk Road seized Bitcoins won't affect the price of Bitcoin are wrong.

They assume that the people buying Bitcoin at government auction would not have bought Bitcoins otherwise. This is almost certainly false in the majority of cases. They are mostly people who want to buy Bitcoins, and decide to buy them at the government auction instead of an exchange. This means fewer bidders on the auctions, which will drive down the price.

First of all if the US had not seized them they would be on the market under sell orders pushing the price down "right now" so this "if" logic is pretty irrelevant.
Secondly I can see so many reasons why a whale would buy from a auction a not from a exchange. It's impossible to buy 3M$ woth of BTC from the exchanges without creating a "huge" price spike. Not to talk about 18M$ . So an auction is an easy way to get hold of a big chunk of BTC at current market prices.
It's also way easier to pay those sums with a simple wire transfer than it is to get 3M$ into an exchange.
I wouldnt be suprised if they are sold above market price  Historical event with a lot of eyes on it. Some whales could easily buy it up with a little premium at which the market will almost certainly follow.

[ljudotina]

It's impossible to buy 3M$ woth of BTC from the exchanges without creating a "huge" price spike.

And it's a "good thing" that same works in another way. Whoever buy that BTC can not sell it all at once on exchanges without loosing HUGE amount of money. Best they can do is set up sell wall that will hold price at some max for long time (untill it all sells). Noone is stupid enough to dump large sum of coins on really shallow exchanges and loose his investment.

[keithers]

I would think that anyone looking to use that mich liquid cash to buy that big of a chunk of BTC,is doing so as a medium to long term investment. With that being said, I think it is highly unlikely that these coins get dumped back on the open market

[ShakyhandsBTCer]

It's impossible to buy 3M$ woth of BTC from the exchanges without creating a "huge" price spike.

And it's a "good thing" that same works in another way. Whoever buy that BTC can not sell it all at once on exchanges without loosing HUGE amount of money. Best they can do is set up sell wall that will hold price at some max for long time (untill it all sells). Noone is stupid enough to dump large sum of coins on really shallow exchanges and loose his investment.

They would likely not buy the bitcoin simply to sell it on an exchange via a "dump" although they may attempt to do an arbitrage.

[Skele]

Of course it impacted the price but, 630 So far...

Bitcoin still have red numbers, before the auction i saw a $700 peak so, let's see what happens in a few days

[NapoleonBonaparte]

I'm enough worried about price of Bitcoin because the news that U.S. Government  wants to sell 30.000 BTC yesterday evening had drop the price of 60$ !

So, only time will give us the answer !

There is only 1 winner on the auction. He paid over 700 usd per coin, well above market rate.