Categories: News

Why bitcoin price jumped following the USMS auction

The Auction

As you have already heard the USMS had an auction for roughly 30,000 bitcoins. The auction ended on friday and the winners were supposed to be announced monday. Surprisingly, the same person was able to score all the bitcoins because he outbid all of his competitors. One auction bidder claimed all the coins! In a statement the USMS said:

“The US Marshals Bitcoin auction resulted in one winning bidder. The transfer of the bitcoins to the winner was completed today.”

What does that mean?

If a single winner outbid all of his competitors then he must have had a very high bidding price. Since the investors and venture capitalists who bid on the coins mostly came from a technological background they knew the true value of bitcoin according to the exchanges. The fact that one bidder won all the coins means he put a very high price to the bitcoins. If the coins sold for such a high price it would not make sense for the winner to simply dump all his coins, because that would mean taking a net loss. As a result, the bidder will hold on to the coins and not cause a dump on the exchange.

In addition to not dumping the auctioned off coins, the USMS auction attracted many investors in general because now people see that the government approves of the sale of Bitcoin and recognizes its fungibility. This whole positive reaction has lead to buy volume and unltimately a spike in price. Currently 1 BTC = $636 as of 7/2/14 on BTC-E:

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We can see a small drop form 650 to 630 probably because of people dumping since bitcoin rose so fast, however bitcoin stands strong at 630 and if the good news continues we should be able to reach $700 no problem.

Newegg

So now that the USMS auction attracted investors who bought bitcoin Newegg comes out with a statement that is now accepting bitcoins. Remember how the news that overstock was accepting bitcoins caused it to rise tremendously, well Newegg’s sales are double those of Overstock, so it is only logical that the price will also rise. Newegg reported $2.7 billion in sales for 2013 compared to Overstock which reported only $1.3 billion in sales for 2013. Keep an eye out for bitcoin, the rise form 560-650 may not be the end of the launch to the mooon.

Please follow us on twitter @btc_feed for the latest bitcoin related news which include bitcoin market analysis with market price prediction.

Mark Arguinbaev

I'm a 28 year old cryptocurrency entrepreneur. I was introduced to Bitcoin in 2013 and have been involved with it ever since. Fun Fact: I mined cryptocurrency using my college dorm room's free electricity.

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Mark Arguinbaev

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