[2014-06-13] Bitcoin Prices Plunge As US Government Prepares To Auction Off Huge

[epere]

http://www.businessinsider.sg/bitcoin-prices-tank-2014-6/#.U5qvNHaBlAY

The agency said it was auctioning off more than 29,000 Bitcoins, worth nearly $18 million at Thursday prices. The amount remains a fraction of the 144,341 bitcoins now in the government’s possession from the Silk Road case.

[bryant.coleman]

lol... all the gains from Expedia / HashPlex wiped out. Bad news for me, as I was preparing to convert some of my coins to fiat. BTW.... which exchange are they going to use, for auctioning the coins?

[Shermo]

Don't they first have to prove that all the Bitcoins are from illegal purposes?

[BurtW]

lol... all the gains from Expedia / HashPlex wiped out. Bad news for me, as I was preparing to convert some of my coins to fiat. BTW.... which exchange are they going to use, for auctioning the coins?

The facts are very easy to find right here:

http://www.usmarshals.gov/assets/2014/bitcoins/

I do not understand why you think they would need or use an exchange (?).  They are going to simply auction them off in 10 blocks of 3,000 coins.

Don't they first have to prove that all the Bitcoins are from illegal purposes?

Many months ago a judge ruled they can/must liquidate (convert to "real" US recognized legal tender) this 30K of BTC.  So, yes, the sale had to be declared legal, and yes, the source of the funds has been determined by a judge to have been from illegal purposes.

[PacoMartin]

Why auction them at all? Shouldn't the government keep them as part of the general wealth of the nation to help back up the dollar?

If that's not a good excuse, they should come in handy for clandestine operations.

[BurtW]

Why auction them at all? Shouldn't the government keep them as part of the general wealth of the nation to help back up the dollar?

If that's not a good excuse, they should come in handy for clandestine operations.

That is not what they are going to do.  They have been told by the judge to sell them so that is what they are going to do.

[bitgold]

Let's petition the White House to allow agencies accepting BTC as currency for government  auctions.

[ClutchThese]

Eek, i was wondering why the price fell so steep these past few days!  I wonder where they will be selling them.

[BurtW]

Eek, i was wondering why the price fell so steep these past few days!  I wonder where they will be selling them.

It is not that hard to read two pages is it:  http://www.usmarshals.gov/assets/2014/bitcoins/

Reading - the lost art.

[Bit_Happy]

lol... all the gains from Expedia / HashPlex wiped out. Bad news for me, as I was preparing to convert some of my coins to fiat. BTW.... which exchange are they going to use, for auctioning the coins?

Wiped out?
BTC was at ~$625 each 24 hours ago (before the "wipe-out"), and about 5 hours ago it was all the way back to $612 (on BTC-e)
The entire "mini-panic" is easy to reverse, the question is what next?

Answer = The Bitcoin fundamentals are solid and we are probably going higher in 2 weeks or less.

[RodeoX]

Don't they first have to prove that all the Bitcoins are from illegal purposes?

That's what I would have thought. What if their case falls apart and they fail to prosecute? Will they have to buy them all back, lol?

[PacoMartin]

That is not what they are going to do.  They have been told by the judge to sell them so that is what they are going to do.

I was being tongue in cheek. As of 31 December 2013 there were 9,247,058,500 c-notes in circulation. It's funny to think that they would be partly backed up by 144K BTC.

[bitgold]

That is not what they are going to do.  They have been told by the judge to sell them so that is what they are going to do.

I was being tongue in cheek. As of 31 December 2013 there were 9,247,058,500 c-notes in circulation. It's funny to think that they would be partly backed up by 144K BTC.

Why? that's 14,400,000,000,000 satoshis !

[bryant.coleman]

Wiped out?
BTC was at ~$625 each 24 hours ago (before the "wipe-out"), and about 5 hours ago it was all the way back to $612 (on BTC-e)
The entire "mini-panic" is easy to reverse, the question is what next?

Answer = The Bitcoin fundamentals are solid and we are probably going higher in 2 weeks or less.

Before the Expedia news came out, Bitcoin was trading in Bitstamp at $650-660. Now it is $570-580, which is equivalent to a 12.5% dip. And I am afraid it might crash even more.

[bitbouillion]

Wiped out?
BTC was at ~$625 each 24 hours ago (before the "wipe-out"), and about 5 hours ago it was all the way back to $612 (on BTC-e)
The entire "mini-panic" is easy to reverse, the question is what next?

Answer = The Bitcoin fundamentals are solid and we are probably going higher in 2 weeks or less.

Before the Expedia news came out, Bitcoin was trading in Bitstamp at $650-660. Now it is $570-580, which is equivalent to a 12.5% dip. And I am afraid it might crash even more.

For any price movement you will find news that fit.  But just pretending that single news have to do something with price movements: Now that the auction of 30k coins is old news and priced in, how can it impact the price further?

I doubt that there will be arbitrage traders on the government auction, since extreme price movements on the exchanges are not unusual. It's quite risky and they could end up with big losses. I guess it's more attractive for long term investors, who want to bag bigger junks of coins without driving the price on the exchanges crazy. 

[cr1776]

Don't they first have to prove that all the Bitcoins are from illegal purposes?

That's what I would have thought. What if their case falls apart and they fail to prosecute? Will they have to buy them all back, lol?

It is civil forfeiture:

http://en.wikipedia.org/wiki/Asset_forfeiture#United_States


The laws on this are crazy and abused regularly, but big government gets its way usually since they have the guns.

[nwfella]

Don't they first have to prove that all the Bitcoins are from illegal purposes?

That's what I would have thought. What if their case falls apart and they fail to prosecute? Will they have to buy them all back, lol?

I seriously doubt they are sweating this scenario et all.  Even if it did come to pass just stick in a slightly larger order for freshly printed fed bills for a day and bingo bango, debt covered by even more wonderful debt.

You know, if I where a huge government in possession of a large # of coins that I found threatening to my "money printing operation"...I don't think I could've thought of a much more effective way to try and crush the confidence in my competition by destroying any sort of confidence in price stability...just sayin.

[PacoMartin]

Why? that's 14,400,000,000,000 satoshis !

Sweden is proving to be the nation that is most hostile to physical currency. Many people view it as a public hazard because of the motivation to rob people. Sweden has the fewest ATM machines per person of any developed country, bank tellers are not allowed to deal in cash transactions at all (keeps insurance down if there are no money drawers), and churches have card readers as an option to make an offering.

As a member of the European Union that does not use the Euro, their currency is only useful inside the tiny nation of 9.5 million. Their banknotes in circulation are worth US$12 billion and the government is actively reducing the quantity of their largest banknote. The 1000SEK=US$150 is reduced to one banknote per capita in circulation. The 500SEK is now the common note in that country (but even that is circulating at only 12 banknotes per capita).

Although they are scheduled to create and print a new banknote in a few years, they may make the leap to go to an all electronic currency. No doubt they will look to Bitcoin for guidance on how to handle transactions and security.

They may not find it shocking to keep some bitcoins as part of their foreign reserves. The fact that one nation adopts this kind of currency will also help with the legitimacy of Bitcoin.

[crunck]

This isn't positive on short term (though it indicates some legality to bitcoins itself as it's sold as hold goods). Wondering who will be getting bitcoins (for most likely a cheaper price).

[PacoMartin]

This isn't positive on short term (though it indicates some legality to bitcoins itself as it's sold as hold goods). Wondering who will be getting bitcoins (for most likely a cheaper price).

Why auction? I'm sure the government doesn't auction cash in foreign denominations.

http://www.nairaland.com/attachments/1567827_P12_JPG280c183cb2c3c6b5c60c48b13a40181f