It’s that time of year again. No, we’re not talking about Christmas. Nor are we referring to the alignment of the seasons or any moment when lunar or weather-based incidents occur. It’s time for another government auction of Ross Ulbricht’s bitcoins.
Also read: Silk Road Agent Sentenced to 78 Months
Ulbricht was sentenced to life in prison in May for his involvement in in the black market website Silk Road. The auction place took on November 5, 2015, following a solid two week period of registration that began on October 19th and ended on November 2nd. In that time, the bitcoin price magically and heavily soared, jumping from an average and less-than-stellar $230 all the way up to the $400 mark.
Many of us couldn’t help but wonder, “What’s going on with bitcoin? Why the sudden change in attitude?” What constituted such a switch, exactly? While most of us were attributing the increase on renewed interest in China, some wondered if the auction and its respective registration process may have had something to do with it all.
Up to this point in time, industry insiders have consistently labeled China as the primary force behind bitcoin’s current (and strong-willed) price movement. One of those leaders is Ph.D. student Robert Viglione, who recently published an academic paper regarding the differences in bitcoin’s price all across the globe. Speaking with CoinDesk, Viglione explained:
“It’s tough to ever say definitely what’s driving asset price movements, but the most compelling story at the moment comes out of China. True to bitcoin’s nature as a disaster asset, as China’s government steps up capital controls to limit one widely used avoidance path, its citizens appear to be shifting resources to the next best option, cryptocurrencies.”
We can’t flat-out ignore these words, and yet in the past, whenever an auction of similar means has taken place, small increases in the price have typically been witnessed, usually over short periods of a few days or something along those lines. Of course, none of those auctions could be classified as “final.” They were merely steps in what would turn out to be a process that would last nearly a year and a half (the first government-based auction took place in July of 2014). This auction was slated to be the last of its kind, with over 44,000 bitcoins up for grabs (worth $18.3 million at press time). Perhaps the size and publicity surrounding the auction is proving to be more beneficial to the price in some way.
Amongst the auction’s largest and most well-to-do participants were Genesis Trading, Digital Currency Group and Binary Financial. Brendan O’Connor, CEO of Genesis Trading, explained his reasoning behind getting involved:
“From our perspective, any time we have an opportunity to buy or sell large quantities we take advantage of it. This is just another really good opportunity to do that.”
In a surprising twist, bitcoin entrepreneur Tim Draper, the original winner of nearly 30,000 bitcoins from the first government auction, expressed that this was one event in which he would not take part. While Draper hasn’t speculated on the reasons for his lack of involvement, he did express incredible surprise and positivity when it came to the subject of bitcoin’s rising price.
What do you think will be the outcomes of the auction? Do you feel it has anything to do with bitcoin’s current price rise? Post your thoughts and comments below!
Image sources: Indpendent.co.uk & InsideBitcoins.com
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