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The US government is cashing in on the Bitcoin hype

Published Jan 11th, 2018 11:54PM EST
Bitcoin price, auction, how to buy
Image: Zach Copley

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The US Marshals Service announced Thursday that it will hold an auction next month to dispose of 3,813 bitcoins, worth a cool $52 million at today’s price. The coins were seized in “various federal criminal, civil, and administrative cases”.

Selling off Bitcoin is a routine process for the US Marshals Service, but the recent boom in cryptocurrency has meant that the enforcement arm of the judicial system is now essentially gambling in crypto-currency. Given the massive price swings that Bitcoin has experienced in the last three months, the precise timing of an auction could have huge implications for how much money the courts receive. But for investors, the simplistic nature of the auction and the large number of coins involved present a one-off opportunity to make a tremendous profit.

Prospective investors have until January 19th to register, and wannabe investors will have to put down a $200,000 deposit before the auction to prove that they’re serious. The coins are being auctioned off in blocks, rather than individually, which is what makes this particular auction interesting. The smallest block is 500 coins, worth around $1.4 million. Large volumes of Bitcoin are not traded as frequently as you’d believe, as most transactions involve a fraction of one coin. Investors may well be able to buy a block for below current market value, and then arbitrage it off in smaller pieces to turn a quick profit.

The auction is not open and all bids are secret, meaning bidders aren’t going up against each other in a room. Winners will be informed of their successful bid on January 22nd.

Chris Mills
Chris Mills News Editor

Chris Mills has been a news editor and writer for over 15 years, starting at Future Publishing, Gawker Media, and then BGR. He studied at McGill University in Quebec, Canada.

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