As the government concludes their auction of nearly 30,000 bitcoin subdivided into 10 separate lots, the market had remained curiously flat. While the announcement of the auction itself back on June 8 sparked some pretty substantial volatility, the week of June 23-30, or the week to the revelation of the winners, saw little movement in price. That is, until June 30 itself. As of 1:30 EST the price had begun to pop, rising nearly five percent on news that 45 bidders participated in the auction.
To even bid on the lots, potential lot buyers had to plop down a refundable $200,000 deposit. The relatively high amount of bidders has apparently sparked belief that the price of the bitcoin lodes, which account for a whopping 0.23 percent of the entire bitcoin supply, might approach or possibly even surpass current market values.
Exceed current market values? It would make sense to bid above market on such a lot to get in before the price was driven up organically. Even the purchase of a few hundred bitcoins can send the global price of BTC up. And it appears that there is a high amount of interest in getting a substantial lot without setting off radars.
Both Names and Ultimate Price Will Spark Movement
Though as of 2 PM EST the names of the auction participants has not been released, there has already been speculation as to their identities, and at least one leaked list has confirmed several key bitcoin luminaries are in on the bidding. Of particular note are Barry Silbert of Second Markets and x, the co-founder of Coinbase. Both men have access to popular platforms that would allow them to unload a large amount of bitcoin quickly, should they choose to do so. If either are confirmed to have won one, several, or all of the lots, it should affect prices dramatically.
Though the identity of the winners will be of keen interest to bitcoin daytraders, the perhaps more immediately pertinent news will be what price they went for. If the bids came in far under the $600 USD or so bitcoin has hovered around for some time, the global price is sure to drop. However, if the bids came in high, the price will of course race to catch up with the overall price, or more specifically, prices the various lots end up going for.
A Bitcoin is a Bitcoin is a Bitcoin
While the debate over classifying bitcoin as a commodity, a currency, or somewhere in between continues to rage throughout the governments of the developed world, the one thing that can’t be debated is that every bitcoin is identical. That is, there are no “grades” of bitcoin. No bitcoin is worth more than another bitcoin. While the code behind each one is unique, each unit is the exact opposite.
So while the origin of these bitcoins, as seized assets from the government raid on the Silk Road deep web marketplace, speaks to the bitcoins shady origins, their place in the bitcoin is the same as any other bitcoin. And if nearly 30,000 of them, or 29,566.510365 to be precise, are flooded into the market, the effect will certainly be felt by the market at large.
Up or down, until both the names of the lot winners and the price they paid is released it’s impossible to know with certainty what will happen to the value of BTC. But one thing is certain, and that is it’s going to change, and the effects will be felt for some time.
As of 2:45 EST on June 30 the price of bitcoin stood at $620.13 apiece, representing a gain of 3.6 percent on the day.
