The second Silk-Road BTC auction, launched by the US government and weighing 50,000 Bitcoins, also attracts old acquaintances again. At that time, 30,000 Bitcoins confiscated from the online black market Silk-Road were already being auctioned.
This time the Bitcoin news probably originate from the mastermind Ross Ulbricht himself
Many of the top-class bidders, including Binary Financial, Bitcoin Investment Trust, Bitcoins Reserve, Mirror (Vaurum), Pantera Capital and Angel investor Tim Draper, will participate in the Bitcoin news on 4 December.
While most participants expect that this auction will not attract as much media attention as the previous one, some Bitcoin news companies are still trying to gain strategic benefit from participating. Development has shown that investing in Bitcoin can be very rewarding, even if the Bitcoin market continues to mature.
Harry Yeh, a partner at Bitcoin-focused investment firm Biary Financial, said in an interview that customer interest was not as strong as last summer:
“I think a lot of people have lost interest since the announcement. I think people will bid, but people also know that there will be more blocks for sale”.
As mentioned by Yeh, the 50,000 BTC are only part of the 144,000 Bitcoins seized by Ulbricht. The USMS had confirmed that the remaining 94,000 BTC would also be auctioned in the coming months. Exact dates were not mentioned.
The money jumping around at the auction is currently still part of an ongoing legal dispute, as Ulbricht wants to sue for his share.
Yeh further explained that it is always possible for wealthy investors to collect blocks of 5,000-20,000 BTC over time in order to avoid a potential premium that could be generated in a hot auction.
Both factors have dampened investor interest:
“No one wants to pay a high premium just to get Bitcoins,” Yeh explained. “Some may be willing, but we’ll wait and see and buy at a fair price.”
Mirror CEO Avish Bhama, whose company is using the 30,000 Bitcoins previously acquired by Tim Draper for its clients’ liquidity purposes, said that the company is participating in the current auction on behalf of its clients.
“With the upcoming auction, we want to make it easy for our institutional clients to buy Bitcoins in a secure manner,” Nhama said.
A small number of participants have already openly announced their intention to participate in the second auction. Venture capitalist and Bitcoin investor Tim Draper told Bloomberg that he intends to participate in the auction. As motivation he mentioned the potential of the groundbreaking technology in Bitcoin and the currently low Bitcoin price.
Bitcoin-focused investment firm Pantera Capital and Bitcoin Investment Trust have both announced that they will now accept bidders who wish to participate in their bids.
Interested parties can contact Pantera by 26 November and provide the necessary information such as volume and price, an anti-money laundering and Know Your Customer (KYC) document and a valid Bitcoin address.
Other potential bidders were reluctant to comment on their participation in the auction and referred to the discretion required at such an auction.
“Due to commercial confidence, we would like to forego a comment,” said the Australian Bitcoin mining company digitalBTC.
Only one of the former bidders, Bitcoin Shop, clearly said the company would not participate in this auction.
“We won’t be participating in the Bitcoin auction because we’re currently looking to do more important things,” the company said.