Ross Ulbricht 140k bitcoins potential auction and market crash in future.

[ArticMine]

Those 140k coins aren't going anywhere for a long time. They will tied up in the courts for years, and this case to say the least is very complex. To get an idea of just some of the issues here, take a look at the Free Ross Ulbricht site: http://freeross.org/ When some time in the future the court cases are finally resolved and the prevailing party decides to sell it is likely they will have an impact on the market. It is also possible this impact is bearish and significant. The trouble for a bear trying to play this is that the crash could be from say 1,200,000 USD per BTC to say 600,000 USD per BTC. So a bear selling at say 560 USD per BTC would be out of luck.

The wheels of justice move very slowly and provide ample time for the slaughter of many a bitbear.

[heartbit]

SO WHY THE FUCK WOULD SOMEONE WITH THAT MUCH MONEY DUMP THOSE COINS AND LOSE TENS OF MILLIONS?

I hate to say this out loud - but I had this scary thought...

This would actually be a cheap investment for the banking system if they collectively thought that doing this was enough to kill bitcoin forever as a competitor.

Given current market volatility and liquidity depth, I imagine a large tranche of coins like this is more likely to sell at below market price than the 30K SR coins being auctioned in next few hours. A 50% discount to market would not be out of the question for 140K coin block.

But let's assume for arguments sake (and to keep my maths easy), that they fetch $500 each. So 140K coins would be $70M. Even at market ($600) it's only $84M worth of coins. A lot to you and I maybe, but a drop in the ocean to banks... after all they can simply create the money!

I can imagine a cartel of 10 or 20 large banks chipping in say $10M each, buying the 140K coins and then dumping them onto the market over a short few days or weeks to hammer the Bitcoin price down to $xx level or lower. Protect their monopoly on the banking system and write off any loss to minimise taxes - it's a win-win for the banks, isn't it?

I'm bullish on bitcoin and usually stay away from tinfoil-hat conspiracy theories - but this scares me...

There must be a hole or two in this thought bubble - anyone??
Posted from Bitcointa.lk - #joL4QKTu8VqQATxq

[ABitNut]

SO WHY THE FUCK WOULD SOMEONE WITH THAT MUCH MONEY DUMP THOSE COINS AND LOSE TENS OF MILLIONS?

I hate to say this out loud - but I had this scary thought...

This would actually be a cheap investment for the banking system if they collectively thought that doing this was enough to kill bitcoin forever as a competitor.

Given current market volatility and liquidity depth, I imagine a large tranche of coins like this is more likely to sell at below market price than the 30K SR coins being auctioned in next few hours. A 50% discount to market would not be out of the question for 140K coin block.

But let's assume for arguments sake (and to keep my maths easy), that they fetch $500 each. So 140K coins would be $70M. Even at market ($600) it's only $84M worth of coins. A lot to you and I maybe, but a drop in the ocean to banks... after all they can simply create the money!

I can imagine a cartel of 10 or 20 large banks chipping in say $10M each, buying the 140K coins and then dumping them onto the market over a short few days or weeks to hammer the Bitcoin price down to $xx level or lower. Protect their monopoly on the banking system and write off any loss to minimise taxes - it's a win-win for the banks, isn't it?

I'm bullish on bitcoin and usually stay away from tinfoil-hat conspiracy theories - but this scares me...

There must be a hole or two in this thought bubble - anyone??
Posted from Bitcointa.lk - #joL4QKTu8VqQATxq

That would be just the banks pissing money away. Dropping 140K coins probably will make the price dip for a bit. But it will recover quickly. No one in their right mind would do that.

[Raystonn]

The most efficient way for banks to deal with Bitcoin is to jump on board.  The big threat to banks is the use of Bitcoin as a payment system, not the use of Bitcoin as a store of value.  The only way to kill the former is to ensure massive volatility forever.  It's just not profitable to attempt this.

[ArticMine]

SO WHY THE FUCK WOULD SOMEONE WITH THAT MUCH MONEY DUMP THOSE COINS AND LOSE TENS OF MILLIONS?

I hate to say this out loud - but I had this scary thought...

This would actually be a cheap investment for the banking system if they collectively thought that doing this was enough to kill bitcoin forever as a competitor.

Given current market volatility and liquidity depth, I imagine a large tranche of coins like this is more likely to sell at below market price than the 30K SR coins being auctioned in next few hours. A 50% discount to market would not be out of the question for 140K coin block.

But let's assume for arguments sake (and to keep my maths easy), that they fetch $500 each. So 140K coins would be $70M. Even at market ($600) it's only $84M worth of coins. A lot to you and I maybe, but a drop in the ocean to banks... after all they can simply create the money!

I can imagine a cartel of 10 or 20 large banks chipping in say $10M each, buying the 140K coins and then dumping them onto the market over a short few days or weeks to hammer the Bitcoin price down to $xx level or lower. Protect their monopoly on the banking system and write off any loss to minimise taxes - it's a win-win for the banks, isn't it?

I'm bullish on bitcoin and usually stay away from tinfoil-hat conspiracy theories - but this scares me...

There must be a hole or two in this thought bubble - anyone??
Posted from Bitcointa.lk - #joL4QKTu8VqQATxq

The flaw is that by the time the legal cases are sorted out the BTC/USD rate could very easily be way above 500 by a few orders of magnitude. I would suggest reading the defence submission here http://www.coindesk.com/ross-ulbricht-attorney-irs-guidance-motion-dismiss-charges/ first and the many complex legal issues it raises. If anyone is prepared to write a call option on BTC/USD with a strike price of 500 USD for the duration of this trail and any subsequent appeals I may be interested, provided of course sufficient collateral is provided.

[lay785]

So if 30k bitcoins from the current FBI auction of silk road coins has contributed to the bitcoin price crashing hard - if the FBI win their case and get to sell Ross Ulbricht's 140k bitcoin stash will the bitcoin price literally crash?

Thoughts people?

Anyone have any updates about Ross Ulbricht's case?

What are his prospects of success?

If his chances of success are slim then smart bitcoin traders should be aware that the market could potentially flash crash at any moment depending on the outcome/announcement by law enforcement. We now have a precedent that American law enforcement are eager to sell seized bitcoins and rake in the cash.

Blah blah blah blah blah blah blah blah.

Oh, sorry, are we having a serious discussion?

Sorry to mention the elephant in the room. Or have I broken the cult rule of the hodlers?

Coindesk has copied my post:

June 27, 2014
"In any case, the elephant in the room is the rest of the stash, the remaining 144,000 bitcoins seized from Silk Road."
http://www.coindesk.com/citi-examines-potential-impact-silk-road-auction-bitcoin-price/

[mikerbiker6]

those coins will be sold off-exchange, so it has no price influence.

[negafen]

those coins will be sold off-exchange, so it has no price influence.

If they are being used, they will eventually end up the the eco system and in the exchange.

[molecular]

those coins will be sold off-exchange, so it has no price influence.

yes it does,.. indirectly and with latency, but it does: the off-exchange sale satisfies a demand that would otherwise be present (in some way) on the exchanges.

It's all connected.

[davidgdg]

It is easy to work out.

The effect of these coins being stolen by the FBI was to temporarily reduce the effective total money supply. This is equivalent to deflation and would have generated an increase in the price (all things being equal). The effect of them being sold by the FBI is to increase the effective total money supply. This is equivalent to inflation and will generate a reduction in the price (all things being equal).

However, the effect should be minimal. 140k coins is  about 1% of the total supply, so all things being equal the price of BTC relative to dollars would fall by no more than 1%.  Of course short term effects due to panic, FUD etc (e.g. the OP) might be greater, but that has nothing to do with the fundamentals. 

[mikerbiker6]

those coins will be sold off-exchange, so it has no price influence.

yes it does,.. indirectly and with latency, but it does: the off-exchange sale satisfies a demand that would otherwise be present (in some way) on the exchanges.

It's all connected.

Ah, you are right.

[CEG5952]

This all depends on how much demand there is off-exchange, which is always difficult to gauge. But it does seem that Barry Silbert, Pantera, some others have been loading up. Whale accumulation style. And Circle gonna need a lot of coins....

[ajareselde]

Noone can predict the future in that case, whales can do as they please, but its important to observe the market and try to figure out where the pressure is aplied, and with what reason.
That way it is not important will the market price go up or down, you will allways have your share.

[hodap]

those coins will be sold off-exchange, so it has no price influence.

Coin being sold off have influence on market regardless of where they are being sold off.

[smoothie]

those coins will be sold off-exchange, so it has no price influence.

Coin being sold off have influence on market regardless of where they are being sold off.

The person buying the coins could then sell them on an exchange but the initial transaction from the government to the buyer will not affect prices directly but rather indirectly if there is news/rumors/etc.

[ArticMine]

... but how can one use this to trade now, not 2 years, 5 years, etc. down the road when these court cases eventually get settled?

[boumalo]

... but how can one use this to trade now, not 2 years, 5 years, etc. down the road when these court cases eventually get settled?

The 144,000BTC will be auctioned if the FBI wins the civil trial and it may be bought up by someone who wouldn't have bought that many bitcoins on the market

In addition it has been priced in already

[segeln]

Those 140k coins aren't going anywhere for a long time. They will tied up in the courts for years, and this case to say the least is very complex. To get an idea of just some of the issues here, take a look at the Free Ross Ulbricht site: http://freeross.org/ When some time in the future the court cases are finally resolved and the prevailing party decides to sell it is likely they will have an impact on the market. It is also possible this impact is bearish and significant. The trouble for a bear trying to play this is that the crash could be from say 1,200,000 USD per BTC to say 600,000 USD per BTC. So a bear selling at say 560 USD per BTC would be out of luck.

The wheels of justice move very slowly and provide ample time for the slaughter of many a bitbear.

exactly,it will take years to auction These Coins.
since they were auctioned off-exchanges like the recent ones,they will not effect the market.
Let alone the spot Price will be much higher than now,as we all suppose
Let`s talk about Ross`s bitcoins in a few years

[painlord2k]

exactly,it will take years to auction These Coins.
since they were auctioned off-exchanges like the recent ones,they will not effect the market.
Let alone the spot Price will be much higher than now,as we all suppose
Let`s talk about Ross`s bitcoins in a few years

If we are lucky, the US Marshal will not need to sell them by the time Ross's bitcoin ownership is sorted out.
They will just use them to buy stuff needed by the government, or could be used to pay back some of the Federal Gov. debt.

[segeln]

If we are lucky, the US Marshal will not need to sell them by the time Ross's bitcoin ownership is sorted out.

but this will take time.Won`t happen in a few months.