Monday, 30 June 2014

U.S. Marshals bitcoin auction draws huge interest, high bids


Bitcoin-auction

SecondMarket and U.S. investment firm Pantera Capital, two of the more prominent bidders in the U.S. Marshals bitcoin auction, on Monday said they were outbid in their attempts to buy some of the nearly 30,000 coins sold late last week.

The rejection of two of the biggest names in the bitcoin industry is a potentially encouraging sign for the long-term prospects of the crypto-currency because this means the auction drew a lot of interest from other institutional as well as new investors.

Pantera Capital chief executive officer Dan Morehead told Reuters the firm was not able to purchase the bitcoins because their bid was below the market price.

"The point is when this auction was announced, bitcoin was trading at $634 US and the general view was that the supply would take the price down," Morehead said.
"But ultimately, the supply increased the demand for bitcoins and now the price was higher than when the auction was announced."

On Friday, the U.S. Marshals Service auctioned off about 30,000 bitcoins seized during a raid on Silk Road, an internet black-market bazaar where authorities say illegal drugs and other goods could be bought. The Marshals Service said it was notifying winners on Monday evening.

A spokeswoman for the U.S. Marshals Service said on Monday the 12-hour auction for about $17.7 million US in bitcoin drew 45 registered bidders and received 63 bids but would not disclose the bidding price of the coins.

"The award process is ongoing, and we will have no further announcements today," said Lynzey Donahue, a spokeswoman for the Marshals Service.

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