If you’ve been following Bitcoin news lately, you would know today US Government announced another 50 thousand Bitcoin to be auctioned to the public. How much Bitcoin does the US Government have anyways? We probably don’t know, but it appears that they have a lot of Bitcoin to be auctioned a little bit each time, every so often. Why don’t the government also auction marijuana? well see that’s the thing government accept Bitcoin existent.
Based on historical data, anytime there’s a big auction like this, 50 thousand Bitcoin, it will surely hurt Bitcoin price slowly. At first the people get panic selling, then some will short sell days before happening, then finally whoever won the auction will most likely sell it little by little and thus causing Bitcoin price to tumble.
So what will the Bitcoin price be after the auction completed on March 2015? – most speculated to be below $100, then a surge in buying will risen up the price of Bitcoin again. Single digit is possible, but it will not be $50 because at this price we would see big surge in purchasing Bitcoin and will cause the price to go up $100 to $200 real fast. However there could those with amount of purchasing power to buy and sell to make a profit, similar to arbitrage.
It is also possible, and hopefully it is, that one of the Bitcoin exchange business such as Bitstamp and Coinbase will enter the auction and win it, otherwise it will fall into the wrong hand and could do harm to Bitcoin. I’m not saying that Coinbase will not do harm, but I feel much safe and better if one of the well known Bitcoin exchange won it, especially coinbase which had been doing a lot of improvements and development to publicize Bitcoin.