Bitcoin Auction Can Benefit the Average Consumer

The upcoming auction of a portion of the Bitcoin seized by the FBI and the US Marshals from the online market place “the Silk Road” earlier this year is drawing significant attention from potential investors across the country. According to Bloomberg, Wall St. investors, as well as tech starts-ups from the Silicon Valley, are lining up to get part of the $17.4 million worth of Bitcoin being auctioned off later this month. Bloomberg provides details on the auction:

The auction of 29,656 bitcoins, part of more than 144,000 the FBI transferred to U.S. Marshals after shutting down the Silk Road marketplace and arrested its operator last year, represents a rare opportunity to secure a large amount of the virtual currency. Because liquidity on the exchanges is low — a trade of 500 bitcoins can move prices — buying from the government offers a chance to avoid paying a premium.

Many large investors are already requesting information from the US Marshals Service about the upcoming June 27th auction. As is mentioned above, this auction gives these investors a rare opportunity to gain a large amount of Bitcoin without having to pay a premium. This means that investors, including hedge funds, that otherwise may have not been drawn to Bitcoin now appear more willing to invest. This has the potential to not only raise the value of Bitcoin, but in turn give more credibility to the cryptocurrency. Therefore, though your average Bitcoin investor will not be able to take place in the auction (unless they are able to deposit $200,000) the larger implications from this auction appear poised to benefit all consumers who use Bitcoin.

Read More- “Bitcoin Auction Draws Wall Street, Silicon Valley Bidders” (Carter Dougherty and Olga Kharif, Bloomberg)

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A rising senior at Colgate University, John is currently working as a research fellow with Consumers' Research.


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