Bitcoin prices were down sharply on mid-week selling, with prices recovering slightly to $561 after dropping from near $600 on Tuesday. The selling started Tuesday night, and was finally met with a burst of buying early Wednesday EST.
It's been mostly a quiet week for Bitcoin and, even though it was a slow news week, most of the stories were generally positive. Despite calls from some parts of the Japanese government to regulate Bitcoin, the ruling party has decided to hold off on a final decision until more information can be gathered from both sides of the debate.
Japan was made famous in the Bitcoin world by being the home of Mt. Gox, that once held the title of the world's largest Bitcoin exchange. Mt. Gox filed for bankruptcy protection in February after claiming hackers stole more than $750,000 in Bitcoins, under mysterious circumstances that don't sit well with many in the Bitcoin trade to this day.
According to CoinDesk, Canada passed bill C-31, a financial reporting bill that also defines regulations and reporting requirements for "dealers of virtual currency" in the definition of a money service business. The new law isn't expected to be fully implemented for at least six months, so Bitcoin businesses will have a bit of time to digest the new regulations.
Here in the US, bidders are lining up for Friday's auction of Bitcoins by the US Marshals Service. If you thought you could just jump in and make a bid, guess again. Bidders have to put up $200,000 to get in on the auction, and you'd be up against buyers from Wall Street and Silicon Valley that include banks, hedge funds, and investment brokers.
One of the challenges for big players in the Bitcoin exchanges is liquidity. Trades of as few as 500 Bitcoins can induce price swings in the market, and the government sale of 29,656 Btc is a chance for big players to stake out a position in the market, without paying the premium of rising prices when buying through the Bitcoin markets. Even after this sale, the government will still have more than 114,000 Bitcoins in its stash, that were seized when Silk Road, the online drug buyer's market, was raided by the FBI.
Overall, the Bitcoin community should probably not consider the entrance of hedge funds and investment brokers to be a positive sign for the digital currency. These are largely the same people who brought the country to near financial collapse, and play the stock market like it's their own private money farm. Having them secure a large financial stake in a market that's still mostly unregulated is not something to welcome with open arms. These are not companies that make money by adding value to markets and processes. These people wouldn't be at the function without a plan to profit off Bitcoin - and that profit, like most of the money they make, will come out of the pockets of smaller players.
On June 30th, the government will announce the winners of the auction - and we may also be finding out who our new digital currency overlords will be.
-RedTeaIndependent News for the Right Minded American ![Kiss](https://bitcointalk.org/Smileys/default/kiss.gif)
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