The U.S. government has announced that it will be auctioning off bitcoins in a three-day auction starting Tuesday, October 26th. The auction will be carried out online and will see the bitcoins auctioned off in batches by the U.S. government. GSA Auctions carry out auctions on behalf of the U.S. government to clear surplus assets and equipment that are owned by the federal government.
The bitcoins will be sold in five batches in an online event titled Fall for Cryptocurrency. Auctions will run for three days from Tuesday, October 26th to Thursday, October 28th. By the time the auctions are completed, about $300,000 worth of bitcoins, 4.94 BTC, will be sold by the U.S. government to the highest bidder.
Auctioning Off The Bitcoin
The auction will include five lots with starting bids all under market price for the bitcoins. All auctions are to be carried out in Atlantan Georgia and the lots will include varying volumes of bitcoins. The first lot will feature the highest volume with 1.50 BTC with a starting bid of $40,809, more than $20,000 less than the market price. Other lots will include a decreased volume of bitcoins to varying degrees. Starting bids for each lot will also decrease for the lots with smaller volumes.
The second lot will see 1.25 BTC being auctioned off at a starting bid of $34,008. Next in line is the third lot with 1 BTC with its starting bid placed at $27,206. 0.75 will be put up for auction at a starting bid of $20,405. And lastly, the fifth lot will see 0.44 BTC auctioned off by the U.S. government at a starting bid of $11,971.
U.S. government auctioning off 4.94 BTC | Source: GSA Auctions
Although these auctions usually start at opening bids much lower than the market price, they rarely ever end up selling below market price. By the time bidding is done on these cryptocurrencies, the winning bid may well be over the market price. This is because interested parties will place competitive bids in order to win out over other parties present at the auctions and this can drive the value of the auctioned BTC up very fast.
BTC price falls to $62K | Source: BTCUSD on TradingView.com
How The U.S. Government Acquires Crypto
The U.S. government acquires its crypto from seizures and forfeitures. Mostly, these crypto are taken from individuals involved in crime, and the assets are seized when the perpetrators are apprehended. Seizures can also occur in instances of tax evasions where individuals’ assets are seized by the U.S. government to compensate for the money owed to the government.
However, the government only holds on to the cryptocurrencies it seizes. Once a case a closed, the government will auction off the crypto in its possession. A good example of this is the bitcoins that were seized during the Silk Road bust. Once the case was concluded, the government had auctioned all of the bitcoins, 144,336 BTC, which sold for about $48 million at the time of the auction.