The price of the digital currency bitcoin had been fairly stable, and mostly bullish, for weeks until news came this week of the U.S. government’s slated auction of 29,657 ill-gotten bitcoins — which converts to more than $16.6 million based on the current exchange rate.
The government seized this particular “stash” of the cryptocurrency in a raid on servers for Silk Road, the black market website, last year.
Since Thursday, the price of bitcoin fell under $600 again on the news of the auction that is set for next week.
Under federal law, the government is required to auction the assets seized by Justice Department agencies, such as the Bureau of Alcohol, Tobacco and Firearms and the Drug Enforcement Agency. According to the U.S. Marshals website, more than 9,000 items of forfeited property bring in some $99 million a year.
Bidder registration opens on June 16 and closes June 23, according to a notice posted on the U.S. Marshals website. Only registered bidders can participate in the auction, which will take place over a 12-hour period on June 27.
Participants will be able to fight for nine blocks of 3,000 bitcoin—each block worth nearly $1.7 million based on today’s conversion (about $560).
“All bids,” the government stipulates, “must be made in U.S. dollars.”
Bidders must pre-register by Monday and wire the Marshals a refundable $200,000 deposit. Bids may be submitted in dollars between 6 a.m. and 6 p.m. on Friday, June 27.
Bitcoin has had a tumultuous year, punctuated by a series of thefts — including one that bankrupted Mt.Gox, the most popular Bitcoin exchange based in Japan.
But bitcoin has managed to avoid volatility over the past several months, trading in a range mainly in the $500s. Various “altcoins”, or alternatives to bitcoin such as litecoin, have also seen a dip in volitality since they usually dove-tail bitcoin.